Here we pick our most relevant announcements from the Chancellor of the Exchequer’s 2024 Autumn Budget Statement to Parliament.
The Autumn Budget 2024 has been billed as an immediate action to fix the foundations of the UK’s economy. The Treasury press release summarises the key points in the Budget Statement, including:
Inheritance tax
- The current threshold of £325,000 to remain until at least 2030.
- From April 2027, inherited pensions are subject to IHT to remove an unintended tax planning loophole.
- From April 2026, the combined business property relief and agricultural property relief will remain at 100% for the first £1m of combined business and agricultural assets in addition to the existing nil-rate band and resident nil-rate band. The rate of relief will reduce to 50% after the first £1m.
Capital gains tax
- CGT rates for non-residential gains, ie stocks and shares and other items, will increase to the current residential CGT rates from 10% to 18% for basic rate taxpayers, and from 20% to 24% for higher rate taxpayers.
- Business asset disposal relief will rise to 14% from 5 April 2025, and 18% from 5 April 2026.
- From 30 October 2024, Investors’ Relief lifetime limit will reduce from £10m to £1m.
Stamp duty land tax
- From 31 October 2024, already passed, the higher rate for additional dwellings surcharge of SDLT in England and Northern Ireland will rise from 3% to 5% hitting landlords further.
Value added tax
- VAT will remain at 20% for standard rate; and
- Although this is subject to a legal challenge, VAT at the standard rate will be added to private school fees and boarding services from 1 January 2025.
Income tax and National Insurance
- Employers’ NIC from April 2025 will rise 1.2% from 13.8% to 15% and will start on employee’s salary from £5,000 down from £9,100, currently.
- However, the employment allowance will increase from £5,000 to £10,500, which means that most small businesses with several employees will not likely pay any employers NIC still. Single director-employee businesses and nanny payrolls are not eligible for the employment allowance, though.
- Employees’ income tax and NIC rates are kept the same.
- The income tax and NIC thresholds in England and Wales will begin to rise in line with inflation from 2028–29.
Corporation tax
- The main higher rate of corporation tax on profits over £250,000 will remain 25% until the next election.
Non-dom regime
- As already announced, a new residence-based regime will replace the current “non-dom” regime from April 2025, but the planned 50% reduction for foreign income and gains (FIG) in the first year of the new regime will be removed.
Other commitments – the Government has also committed to:
- maintain the current capital allowances system (including permanent full expensing and the £1m AIA);
- maintain the current R&D reliefs.
Please feel free to review the HMRC policy paper here: Autumn Budget 2024 – Overview of tax legislation and rates (OOTLAR) for full details on these announcements and more.
View the Chancellor’s speech in full: Autumn Budget 2024 speech.