The 2024 Autumn Budget: At a glance

The 2024 Autumn Budget has been one of the most widely anticipated fiscal events in recent years. The first Budget delivered by the new Labour government has been subject to widespread speculation, rumour and debate, even before most measures were announced.

Now that the Autumn Budget has been delivered, here are some key announcements related to businesses, individuals and their taxes.

Income Tax, CGT and IHT

• The current freeze on income tax and National Insurance thresholds will not be extended, so will end in 2028 from when index-linked increases will return. 

• Capital gains tax on profits from selling capital assets such as shares will rise immediately from a maximum of 20% to a maximum of 24%, in line with the current rate on residential property (excluding own homes) which will not change. 

• The Business Asset Disposal Relief rate of capital gains tax will increase to 14% in April 2025 and 18% in April 2026, bringing it back into line with the increased lower rate of capital gains tax
  

• The freeze on inheritance tax (IHT) thresholds, which previously ran until 2028, has been extended to 2030. 

• The Stamp Duty Land Tax (SDLT) surcharge paid on second homes and residential property acquired by companies in England and NI will rise from 3% to 5% from 31 October 2024. 

Taxes for Businesses 

• The rate of National Insurance employer contributions will increase from 13.8% to 15% in April 2025; and they will need to pay NI on employee earnings above £5,000, not the current £9,100. 

• The employment allowance for reducing employer’s NI liability will increase from £5,000 to £10,500.  Taken together these changes will reduce the cost for some smaller businesses whilst increasing it for larger ones.

• The main rate of Corporation Tax will remain at no more than 25% until the next election, and the small profits rate will continue at its current levels.

• Some anti-avoidance measures have been included to introduce small additional conditions for reliefs on disposal of shares to an Employee Ownership Trust, following the previous consultation in this area.

• Targeted anti-avoidance will also be introduced to counter arrangements where associated companies could act together to avoid paying the tax due on loans made to shareholders. 

Other notable announcements 

• The minimum wage for over 21s will increase to £12.21 from April, up from the current minimum wage of £11.44. 

• For 18-20 year olds, it will increase from £8.60 to £10, as the start of a process to bring it into line with that for over 21s. 

• As anticipated in the build-up to the Budget, the £2 cap on single bus fares in England will be raised to £3 from January 2025. 

• The current 5p cut to fuel duty on petrol and diesel will be extended for another year after being initially due to end in April 2025, and the planned index-linked increase will not go ahead either. 

• Air Passenger Duty for private jets will increase by 50%. 

• Tobacco duty will increase by 2% above inflation (10% above inflation for hand-rolling tobacco). 

• Alcohol duty on draught beverages, like lager and ale, will be cut by 1.7%, while tax on non-draught alcoholic beverages will increase by the RPI measure of inflation. 

More to come from Shorts

The Shorts Tax team is carefully analysing the Autumn Budget statement, and we will soon be publishing our detailed reaction to the Chancellor’s speech. This will include all major announcements with commentary on what they might mean for our clients. 

In the meantime, if you have an urgent query or concern following the Autumn Budget, please use the form below to contact our tax team, and we will be happy to help.