Chancellor Rachel Reeves delivered her first Autumn Budget on Wednesday 30 October, unveiling a series of measures that she said will “restore stability, protect working people, fix the NHS and rebuild Britain”.

The Chancellor announced that taxes would rise by £40 billion, a move designed to tackle the £22 billion "black hole" in public finances uncovered by the new government in July.

On the inflation front, the Office for Budget Responsibility (OBR) forecasts paint a picture of gradual improvement. According to the Chancellor, inflation is expected to average 2.5% in 2024, with a slight increase to 2.6% in 2025, before steadily declining to 2% by 2029. 

Here are a few of the key takeaways:

• National Insurance to rise to 15% for employers. Also, the threshold at which businesses start paying National Insurance on a workers' earnings will be lowered from £9,100 to £5,000.
• Increase to employment allowance to help smaller businesses. The employment allowance will increase from £5,000 to £10,500, which the chancellor says will mean 865,000 employers won’t pay any National Insurance at all next year.
• Capital Gains Tax (CGT) increases. The lower rate of CGT will rise from 10% to 18%, and the higher rate from 20% to 24%. The CGT on residential property will remain at 18% and 24%.
• Non-dom tax regime will be abolished. Reeves says she will abolish the non-dom tax regime and remove the "outdated concept" of domicile from the tax system from April 2025. Instead a new, residence-based scheme with "internationally competitive arrangements" for those coming to the UK on a temporary basis, will be introduced.
• VAT on private school fees confirmed. VAT on private school fees will be introduced from January 2025, and the government will soon introduce legislation to remove their business rates relief from April 2025.
• National Minimum Wage to rise by 6.7%. The National Living Wage for people aged 21 or older will rise by 6.7% from £11.44 an hour to £12.21 from April 2025. The National Minimum Wage will rise for people aged between 18 and 20-years old from £8.60 to £10. Apprentices will see hourly pay increasing from £6.40 to £7.55.
• Inheritance tax threshold freeze extended for a further two years to 2030. 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, and £1 million when a tax free allowance is passed to a surviving spouse or civil partner.
• Stamp Duty rise in effect from today, Thursday, 31 October 2024. Stamp Duty Land Tax for second-homes will increase by 2% to 5%.

Our Budget Summary goes into detail about all of the announcements made and is available to download below. 

If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected by the Budget, please speak to your relationship partner or email us at hello@sb-p.co.uk

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