Today, the Chancellor, Rachel Reeves delivered the government’s Autumn Budget 2024. Key points include:
National insurance
• Employers’ national insurance contributions (NIC) will increase from 13.8% to 15% from April 2025.
• The secondary threshold, the level at which employers start paying national insurance on each employee’s salary, will be reduced from £9,100 a year to £5,000.
• Small businesses could be partially protected. Employers with NIC bills of £100,000 or less receive an allowance on the first £5,000, this is expected to rise to £6,000.
Income tax
• Personal tax thresholds on income tax and national insurance will increase in line with inflation from 2028-29.
Capital gains and inheritance tax
• Capital gains tax will increase. The lower rate will rise from 10% to 18%, while the higher rate will increase from 20% to 24%.
• The threshold for inheritance tax will remain, allowing £325,000 to be inherited tax free.
• There will be tax raises worth £2bn from reforming reliefs for business and agricultural assets. After £1m, those assets will attract inheritance tax of 20%.
Pensions
• The government will bring unused pension funds and death benefits payable from a pension into a person’s estate for inheritance tax purposes from 6 April 2027, which will affect around 8% of estates each year. In practice this affects uncrystallised defined contribution (DC) pensions, crystallised DC pensions not invested in annuities, and lump sum death benefits from defined benefit (DB) pensions.
The minimum wage
• The “national living wage”, the legal minimum for over-21s, will increase to £12.21.
• There will be a single adult rate phased in over time to equalise pay for under-21s.
Housing
• £5bn will be spent on new homes to deliver the government’s housing plan.
• Reduce right-to-buy discounts, and local governments will retain the earnings from council housing sales to reinvest.
• New planning officers will be recruited to accelerate housebuilding.
Transport
• Support promised for the east-west rail link between Oxford and Cambridge.
• Fund the tunnelling work to bring HS2 to London Euston station.
Energy
• £3.4bn for the warm homes plan to upgrade buildings.
• The government will fund Great British Energy – a new, clean energy company.
Public investment
• Government will invest £1bn in aerospace, £2bn in the automotive sector to support electric vehicles, and £500m for life sciences.
• £6.1bn will be invested by the government in funding sectors such as engineering, biotechnology and medical science.
Business taxes and non-doms
• Businesses will receive 40% relief on business rates for retail and hospitality up to a cap of £125,000.
• Non-domicile tax regime to be abolished from April 2025.
Property
• Stamp-duty land tax surcharge for second-homes known as the ‘Higher Rate for Additional Dwellings’ will increase from 3% to 5% from tomorrow.
Other measures
• Raise £6.5bn through targeting tax avoidance, including by umbrella companies.
For any further information please contact our teams at enquiries@bpcollins.co.uk or call 01753 889995.
