Highlights from the Autumn Budget
Catherine Alexander
Partner at GDA
The Autumn Budget was today delivered by Chancellor of the Exchequer, Rachel Reeves. The chancellor promised a decade of national renewal, and presented her long-term plan to rebuild Britain which raises £40b this budget. In regards to financial planning and investments the following has been announced:
The minimum wage rises to £12.21 per hour, an increase of 6.7%. For 18-20 year olds, this rises to £10 per hour, an increase of 16.3%. Rates for the 16-17 age group and apprentices both go up by 18% to £7.55 per hour. Working towards the creation of a single minimum wage for all workers in the future.
Carers allowance is increased to the equivalent of 16 hours at the national living wage per week. The largest increase in carers’ allowance since it was introduced in 1976
The pension triple lock is protected so that the state pension will rise by 4.1% in April 2025.
The Pension Credit Standard minimum guarantee will also rise by 4.1%.
National Insurance, Income Tax and VAT will not be increased for ‘working people’.
The Income Tax and National Insurance threshold freeze will not be maintained from 2028-29 and will be increased in line with inflation.
Employers National Insurance will increase by 1.2% to 15% from April 2025, and the threshold cut from £9,100 to £5,000 before National Insurance is paid.
Employment Allowance increased for small businesses from £5,000 to £10,500, meaning 865,000 employers won't pay any national insurance at all next year and over one million will pay the same or less than they did previously.
The main rate of Capital Gains Tax (CGT), which covers shares and various assets, will rise from 10% and 20% to 18% and 24% for basic and higher rate taxpayers, respectively.
CGT on residential property will be maintained at 18% and 28%. The higher rate is being maintained at 24%.
Business Asset Disposal Relief will be maintained at £1m.
The freeze on Inheritance Tax (IHT) will be extended until 2030.
Inherited pensions will be brought into the IHT system and this will come into effect from 2027.
The first £1m of combined business and agricultural assets will continue to attract no IHT. For assets over £1m, IHT will apply with 50% relief at an effective rate of 20%.
A 50% relief would apply in all circumstances on IHT for shares on the alternative investment market (AIM), and other similar markets, setting the effective rate of tax at 20%.
A 40% relief on business rates for the retail, hospitality and leisure industry in 2025-26 up to a cap of £110,000 per business
The non-dom tax regime will be abolished.
Removal of the concept of domicile from the tax system from April 2025.
Increase in CGT on carried interest within the fund management industry.
The Stamp Duty Land Tax (SDLT) surcharge for second homes will increase from 3% to 5% from 31st October 2024.
The Right to Buy (RTB) discount will be reduced.
VAT will be charged on private school fees from January 2025, and business rates relief will be removed from April 2025.
This article isn’t personal advice. If you’re not sure whether a course of action is right for you, ask for financial advice.
