Autumn Budget 2024 – Key Points

The Chancellor Rachel Reeves delivered the Autumn Budget 2024 speech at 12.30pm today which lasted over 80 minutes.  The first Budget speech made by a Labour Government since 2010. 

The speech was highly anticipated and considered to be a big, consequential one.  The Chancellor has announced £40bn of tax rises of which £25bn is set to be covered by employers.

In her speech, the Chancellor stated that the choices she has made are the right choices to restore stability in public finances, to protect working people, to fix the NHS and to rebuild Britain.

Watch our short video summary on YouTube below (less than 8 minutes):

The key points announced in the Autumn Statement are summarised below:

Income Tax

• No increase to the basic, higher or additional rates of Income Tax.
• Current income tax thresholds frozen to April 2028.
• Income Tax thresholds will increase in line with inflation from April 2028.

National Insurance

• Increase in the rate of Employer’s National Insurance from 13.8% to 15% with effect from April 2025.
• The threshold from when the Employer’s start to pay Employer’s National Insurance is reduced from £9,100 to £5,000 per year.  This will apply from April 2025.
• The employment allowance will increase from £5,000 to £10,500.
• The £100,000 threshold is removed expanding the employment allowance to all eligible employers.

Capital Gains Tax

• The lower rate of Capital Gains Tax will rise from 10% to 18% with effect from 30 October 2024.
• The higher rate of Capital Gains Tax will rise from 20% to 24% with effect from 30 October 2024.
• Residential property rates of Capital Gains Tax to remain as 18% and 24%.
• Business Asset Disposal Relief (BADR) and Investor’s Relief remain at 10% for 2024, increasing to 14% from April 2025 and increasing to 18% for tax year 2026/2027.
• Lifetime limit for BADR remains at £1m.
• EIS and VCT reliefs extended to 2035.
• Carried interest tax rate on managed funds will be increased from 28% to 32% from April 2025 and further reform will take place from April 2026.

Stamp Duty Land Tax

• Increase in the higher rate for additional dwellings from 3% to 5% effective from 31 October 2024.

Inheritance Tax

• Nil Rate Threshold frozen at £325,000 to 2030.  Increasing to £500,000 if estates contain a residence passed to a descendant.
• Inherited unspent pensions will be subject to Inheritance Tax from 2027.
• For Agricultural Property Relief and Business Property Relief from April 2026, the first £1m of assets will be exempt from Inheritance Tax.  Assets over £1m will attract a 50% relief making a net 20% Inheritance Tax rate.
• 50% relief for shares on the Alternative Investment Market (AIM).

Wages and benefits

• As pre-announced for workers aged 21 and above, the National Living Wage (NLW) will increase by 6.7% from April 2025 to £12.21 per hour.  An increase of £1,400 per year to a full time worker on the NLW.
• For workers aged 18-20 years old, the National Minimum Wage (NMW) will increase by 16.3% from April 2025 to £10.00 per hour.
• The ultimate objective is for one single adult rate.
• Carers Allowance claimants – the earnings limit will be increased to the equivalent of 16 hours per week at NLW.  Threshold increased from £151 to £195 per week.
• From April 2025, the basic and new state pension will be increased by 4.1%.  An increase of £470 in the year.

Business

• Maintain the capital ‘full expensing’ and Annual Investment Allowances. This allows businesses to offset investment in items such as new IT equipment and factory machinery against tax.
• Corporation Tax rate capped at 25% for the duration of the current parliament.
• For business rates, there will be a permanently lower business rates multiplier for high street retail, hospitality and leisure properties from 2026/2027.
• To fund this lower rate multiplier there will be a higher multiplier introduced for expensive properties.
• The small business rate relief multiplier is frozen for high street and small businesses in England for 2025/2026.
• There will be a business rates relief of 40% for retail, hospitality and leisure businesses subject to a maximum discount of £110,000 from 2025/2026.

Education

• Apply VAT on private school fees from January 2025.
• Business rate relief for private schools will be removed from April 2025.
• Triple investment in school Breakfast Clubs.
• Reforming Special Educational Needs provision.

Inflation

• Inflation is expected to be 2.5% by the end of 2024 increasing to 2.6% in 2025 and falling to 2.0% by 2029.

Growth

• Economy growth expected to be 1.1% by the end of 2024 increasing to 2.0% in 2025 and falling to 1.6% in 2029.

Non-Dom Tax Regime

• The non-dom tax regime will be abolished.
• Term ‘domicile’ for tax purposes to be removed from 2025.
• New residence based scheme to be introduced to encourage investment into the UK and to make sure that everyone who makes their home in the UK pays their taxes here.

Duties

• Fuel duty frozen and extending the temporary 5p cut for one year.  This will save the average car driver £59 in 2025/2026.
• Strengthening incentives to purchase electric vehicles and maintaining the electric vehicle incentives in the company car tax regime.  100% First Year Allowance for zero emission cars and electric vehicle charge points.
• Vehicle Excise Duty paid by owners of all but the most efficient new petrol cars to double in their first year.
• New tax of £2.20 per 10ml of vaping liquid from October 2026.
• Tobacco duty to increase by 2% above inflation and 10% above inflation for hand-rolling tobacco.
• Rise in Air Passenger Duty.  £2 per economy passenger per flight.
• For private jets, increase rate by 50% meaning £450 duty per passenger per flight.
• Alcohol duty on draught products cut by 1.7% from February 2025 – ‘penny off a pint in the pub’.
• Alcohol duty on non-draught products will increase in line with Retail Price Index.

Other

• Invest to modernise HMRC systems and recruit more staff for HMRC.
• Increase in the % rate of interest charged on unpaid tax.
• Plans to make work pay will include protection from unfair dismissal and improve access to maternity and paternity leave.
• £11.8bn allocated to compensate victims of the infected blood scandal with £1.8bn set aside for wrongly prosecuted Post Office sub-postmasters.