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Here are the main points from the 2024 Autumn Budget. If you think you may be affected and would like some advice please email us or call 01724 854000

National Insurance Contributions (NICs)
While there will be no increase in NICs for employees, employers will see an increase of 1.2 percentage points in their NIC rate, raising it from 13.8% to 15% from April. The secondary threshold—the point above which employers start paying NICs—will also be lowered from £9,100 to £5,000. These adjustments are anticipated to generate an additional £25 billion annually by the end of the forecast period.

Capital Gains Tax (CGT) and Inheritance Tax (IHT)
The Budget includes an increase in capital gains tax rates, with the lower rate rising from 10% to 18% and the higher rate from 20% to 24%. Additionally, the current inheritance tax threshold will remain frozen, allowing estates up to £325,000 to be inherited tax-free. New reforms will also adjust reliefs on business and agricultural assets, with assets valued above £1 million subject to a 20% IHT rate.

Duties on Tobacco, Alcohol, and Vaping Products
A new levy will be introduced on vaping products, aligning them more closely with the tax treatment of tobacco. To support the hospitality sector, draught duty will be reduced by 1.7%, effectively saving one penny per pint.

Fuel Duty
The Chancellor has extended the current freeze on fuel duty for an additional year, maintaining the 5p per litre cut initially introduced in March 2022 in response to rising global oil prices.

Transparency and Accountability: OBR Review
Rachel Reeves committed to adopting all ten recommendations from the Office for Budget Responsibility (OBR) following a recent review. This action aims to improve transparency, addressing a £22 billion funding gap attributed to prior government spending commitments.

Compensation Schemes for Historical Injustices
The Budget allocates £11.8 billion to compensate victims of the infected blood scandal and an additional £1.8 billion for those affected by the Post Office Horizon IT scandal.

Inflation and Economic Growth Forecasts
The inflation target will remain at 2%, with projected averages of 2.5% in 2024 and 2.6% in 2025, eventually stabilising at 2% by 2029. GDP growth forecasts have been revised to 1.1% for 2024, with gradual changes expected through to 2030, indicating steady but moderate growth.

Government Borrowing Strategy
The government has committed to avoiding borrowing for operational expenses, aiming to balance the budget within three years. Forecasts indicate a deficit of £26.2 billion by 2026, transitioning to a surplus by 2027. Public sector net debt is expected to decline from £127 billion in 2024 to £70.6 billion by 2030.

National Living Wage Increase
The legal minimum wage, or “national living wage,” for those over 21 will increase by 6.7% to £12.21, benefiting full-time workers with an annual increase of approximately £1,400. Plans are also in place to gradually align pay for younger workers.

Changes to Air Passenger Duty
Air passenger duty for economy short-haul flights will increase by up to £2, while private jet passengers will face an additional charge of up to £450 per passenger.

Support for Businesses
Retail and hospitality businesses will receive 40% relief on business rates, up to a cap of £25,000.

Abolition of Non-Domicile Tax Status
The Budget confirms the abolition of the non-domicile tax status, effective from April.

Tackling Tax Avoidance
To address tax avoidance, the government will raise £6.5 billion through targeted reforms, including measures aimed at umbrella companies.

This post is for information purposes only.