30/10/2024

Autumn Budget summary 2024

On Wednesday 30th October 2024, Chancellor Rachel Reeves announced the Labour Party’s first budget in 14 years. The Chancellor of the Exchequer stated the latest budget would aim to restore economic stability in the UK and expand growth opportunities for SMEs.

With tax changes forecast to raise £40 billion in government funds and a goal of reducing UK inflation to 2.0% by 2029, we have summarised the key announcements in our Autumn Budget 2024 summary.

Capital Gains Tax

  • Capital Gains Tax (CGT) will see an increase from 10% to 18% for basic rate taxpayers and an increase for higher rate taxpayers from 20% to 24% from 30th October.
  • Primary residences will continue to be exempt from CGT.
  • The rates on residential property will remain at 18% and 24%, and Business Asset Disposal Relief (BADR) will also remain at £1 million of lifetime gains.

National Insurance and personal taxes

  • Employers’ National Insurance (NI) contributions will rise from 13.8% to 15%.
  • In addition to this, the threshold at which businesses start paying NI on a worker’s earnings will be lowered from £9,100 to £5,000, with the overall changes forecasted to raise £25 billion.
  • The Employment Allowance will also be increasing, to support the growth of smaller businesses, from £5,000 to £10,500.
  • The freeze on NI, VAT and Income Tax contribution thresholds will remain in place until 2028/29.

Inheritance Tax

  • The Inheritance Tax (IHT) threshold freeze has been extended a further two years until 2030.
  • From April 2026, the first £1 million of combined business and agricultural assets will continue to attract no IHT, but assets over £1 million will be subject to IHT with 50% relief meaning an effective rate of 20% applies.
  • Shares on the Alternative Investment Market (AIM) and similar markets will now be subject to IHT with a 50% relief, meaning an effective rate of 20% applies.
  • Unspent pension pots in excess of the IHT thresholds will also be subject to the tax from 2027.

Stamp Duty Land Tax (SDLT)

  • The government will be increasing the Stamp Duty Land Surcharge for second homes, with effect from tomorrow (Thursday 31st October 2024), from 2% to 5%.

Non-domiciled status

  • From April 2025, the government will be abolishing non-dom status and replacing it with a residence-based regime, bringing foreign earnings into the inheritance tax system.

Wages and pensions

  • The legal National Living Wage will increase from £11.44 to £12.21 per hour from April for over-21s.
  • The rate for 18 to 20 year-olds will go up from £8.60 to £10, which is part of a long-term plan to move towards a ‘single adult rate’.
  • Basic and new state pension payments are to go up by 4.1% next year.

Investment areas

  • The Chancellor confirmed funding for various sectors to aid in growth and innovation, with £1 billion confirmed for the aerospace sector, over £2 billion for the automotive sector and up to £520 million for a new Life Sciences Innovative Manufacturing fund.
  • More than £20 billion will be funded into the science sector, with at least £6.1 billion protecting core research funding for area such as engineering, biotechnology and medical science.

Fuel duty

  • The 5p cut in fuel duty, due to end in April 2025, has been kept on for another year.

Download our full 14-page Autumn Budget 2024 summary

If you would like more information on today’s budget or tailored advice on how the key changes announced in the Autumn Budget 2024 could impact your finances, get in touch with us to discuss your needs with our expert financial planning team.

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