Autumn Budget 2024: Key Takeaways for Businesses and Individuals
Written by Sach
The 2024 Autumn Budget has been announced, and it’s packed with changes that will impact both businesses and individuals. As your trusted accounting partner, we’ve analysed the key announcements and compiled this comprehensive summary to keep you informed.
Personal taxes:
Income Tax
- The good news is that income tax rates will remain unchanged. The threshold freeze will also not be extended, meaning that from 2028-29, personal tax thresholds will be uprated in line with inflation.
Capital Gains Tax
- The lower rate of Capital Gains Tax (CGT) will increase from 10% to 18%, and the higher rate from 20% to 24%.
Inheritance Tax
- The Inheritance Tax threshold freeze will be extended for another two years, until 2030. This means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants.
- A loophole allowing inherited pensions to escape inheritance tax will be closed from April 2027.
Agricultural and Business Property Relief will also be reformed, with the first £1 million of combined business and agricultural assets remaining tax-free.
National Minimum Wage
- The National Minimum Wage will see a significant increase. It will rise by 6.7% to £12.21 an hour, which translates to a £1,400 annual increase for a full-time worker.
- For 18- to 20-year-olds, the National Minimum Wage will increase by 16.3% to £10 an hour.
For Businesses:
Employers National Insurance
- Employers’ National Insurance contributions will increase by 1.2 percentage points to 15% from April 2025. The secondary threshold (the level at which employers start paying National Insurance on each employee’s salary) will be lowered from £9,100 to £5,000 per year.
Employment Allowance
- However, the Employment Allowance will increase from £5,000 to £10,500, meaning 865,000 employers won’t pay any National Insurance next year.
Business Rates
- Businesses in the retail, hospitality, and leisure sectors will benefit from a 40% relief on business rates in 2025-26, capped at £110,000 per business.
From 2026-27, two permanently lower tax rates will be introduced for these businesses, offset by a higher multiplier for the most valuable properties.
Business Asset Disposal Relief
The lifetime limit for Business Asset Disposal Relief will remain at £1 million. The relief will stay at 10% this year, rising to 14% in April 2025 and 18% from 2026-27.
Creative Industries
The Autumn Budget also includes several provisions aimed at supporting the creative industries:
- Tax Relief for Visual Effects: The government will legislate to provide additional tax relief for visual effect costs in television and film.
- Investment in Studio Sites: £25 million will be provided to the Northeast Combined Authority to remediate the Crown Works Studio site in Sunderland, with the aim of creating 8,000 new jobs.
- Support for Innovation: The government will protect funding for Research and Development (R&D), including over £6 billion for core research funding in areas such as engineering, biotechnology, and medical science. This funding can be accessed by research councils, national academies, and the creative industries to drive innovation.
These measures demonstrate the government’s commitment to supporting the growth and development of the UK’s creative sector.
Other Important Announcements
- Corporation Tax: The government has reaffirmed its commitment to cap the Corporation Tax rate at 25% for the duration of this Parliament.
- Non-dom Tax Regime: The non-dom tax regime will be abolished from April 2025, with a new residence-based scheme introduced.
- Energy Profits Levy: The levy on oil and gas companies will increase to 38% and will now expire in March 2030.
- VAT on Private School Fees: VAT will be introduced on private school fees from January 2025.
- Fuel Duty: Fuel duty will be frozen for the next two years.
- Public Spending: Significant investment is planned for infrastructure, housing, transport, and the NHS.
Need Help?
- Contact Pennyhills® today to schedule a consultation with one of our experienced accountants.
We can help you navigate these changes and take proactive steps, ensuring compliance whilst minimising your tax exposure.
Visit www.pennyhills.com/contact-us to reach out to us and discover how we can partner with you on your journey. You deserves the expertise and dedication that Pennyhills® brings to the table. Let’s embark on this journey together.
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