Rachel Reeves stood up yesterday to deliver the first Budget by a woman, “in our country’s history” and stated that “the only way to drive economic growth is to invest, invest, invest.”
The Chancellor introduced measures including hikes in National Insurance Contributions, Capital Gains Tax, Stamp Duty Land Tax as well as changes to Inheritance Tax reliefs, which she says, “raises taxes by £40bn.”
Now let’s not beat around the bush. When it comes to the Budget, amounts of money are usually talked about like its small pocket change. But £40bn, is one hell of an amount of money.
The new Government set out significant investment plans to “rebuild Britain once again” but the Chancellor didn’t hold back when confirming the raises in taxes.
Also, within her Budget, the Chancellor reaffirmed that this Government hopes to raise £6.5bn by giving HM Revenue & Customs (HMRC) new technology and hiring extra staff to crack down on unpaid taxes, to reduce the tax gap in the UK.
This could mean an increase in HMRC enquiries being opened to the taxpayer. To ensure you and/or your business is covered for such HMRC enquiry, please visit our website here to learn more about our Business Protection Package.
If you didn’t manage to watch or hear the Budget being delivered, we have summarised the main takeaways, in our Autumn Budget Summary. You can find the link to this below.
Here we have summarised some of the key points of the Budget.
Employer’s National Insurance Contributions
From 6 April 2025, Employer’s National Insurance Contributions (NICs) will be increased as follows:
- From 6 April 2025 the main rate of Class 1 Employer NICs will be increased from 13.8% to 15%;
- The threshold in which businesses start paying NIC will be lowered from £9,100 to £5,000;
- The Employment Allowance will increase from £5,000 to £10,500.
Capital Gains Tax
From 30 October 2024, Capital Gains Tax (CGT) will increase as follows:
- The lower rate of CGT for disposals will increase from 10% to 18%;
- The higher rate of CGT will increase from 20% to 24%.
This will mirror the rates of CGT payable for the disposals of residential property.
Business Asset Disposal Relief (BADR) which can be claimed if certain conditions are met, will increase from 10% to 14% from 6 April 2025 and again from 6 April 2026 to 18%.
The lifetime allowance will remain at £1m.
CGT on performance fees and “carried interest” will also increase from 28% to 32%, with effect from 6 April 2025.
Inheritance Tax
From 6 April 2026, Business Property Relief (BPR) and Agricultural Property Relief (APR) will continue to apply at 100% for only the first £1m of combined business and agricultural property.
The rate of relief will be 50% thereafter, and in all circumstances for shares designated as ‘not listed’ on the markets of recognised stock exchanges, such as AIM.
The IHT Nil Rate Band (NRB) of £325,000 has been frozen by a further two years to 5 April 2030, together with the Residential Nil Rate Band (RNRB) of £175,000.
The Residence Nil Rate Band taper will continue to start at £2m.
Unused pension funds and death benefits payable from a pension will be brought into a person’s estate for IHT purposes from 6 April 2027.
At the moment, pensions are usually passed on tax free if you die under the age of 75 – or taxed at the beneficiaries’ marginal rate of income tax if you die over 75 – but in most cases pensions don’t attract IHT.
As part of these changes, pension scheme administrators will become liable for reporting and paying any inheritance tax due on unused pension funds and death benefits.
Stamp Duty Land Tax
From 31 October 2024, the higher rate of Stamp Duty Land Tax (SDLT) payable on purchases of additional dwellings and by companies, will increase from 3% to 5% above the standard residential rates.
There will also be an increase in the single rate of SDLT payable by companies and non-natural persons acquiring dwellings for more than £500,000, from 15% to 17%.
Electric Vehicles
From 6 April 2028, the appropriate percentage for zero emission and electric vehicles will increase by 2% to 7%.
From 6 April 2029, this will increase further by 2%, to 9%.
National Living Wage & National Minimum Wage
From 1 April 2025, the National Living Wage and the National Minimum Wage will change as follows:
- Apprentice rate will increase from £6.40 per hour to £7.55 per hour;
- The under 18 rate will increase from £6.40 per hour to £7.55 per hour;
- The rate for 18-20 year olds will increase from £8.60 per hour to £10.00 per hour;
- The rate for 21 year olds and over will increase from £11.44 per hour to £12.21 per hour.
The Autumn Budget 2024 Speech
Autumn Budget 2024 speech – GOV.UK
The Autumn Budget 2024 Summary
NRB – Autumn Budget 2024 – Summary
Further Information
If you would like to discuss how these changes may affect you and/or your business, please contact your usual NRB advisor or our tax team.
Please note, the content of this Autumn Budget summary is intended for general information purposes only. The content should not be relied upon in its entirety and shall not be deemed to be or constitute advice.
While we believe this interpretation to be correct, it cannot be guaranteed, and we cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained within this summary. Please obtain professional advice before entering into or altering any new arrangement.
