Autumn Budget 2024 – All you need to know

Key highlights from the UK Autumn Budget 2024

Here are the key highlights from the UK Autumn Budget 2024 announced on October 30, covering updates on capital gains tax, national insurance, and other fiscal measures:

National Minimum Wage and National Living Wage

From April 2025, the National Living Wage will rise by 6.7% to £12.21 for workers aged 21 and over. Full-time workers over age 20 are to gain an extra £1,400 annually. With this increase, the new annual salary for a full-time worker will be £23,809.76 before tax and the daily earnings for a standard 7.5-hour workday will be £91.58

Additionally, minimum wage rates for younger workers (16-20) and the accommodation offset rate will also increase.

National Insurance (NI)

– Employers’ NI Contribution: Increased by 1.2% from April 2025, moving from 13.8% to 15%, along with a reduction in the secondary threshold from £9,100 to £5,000. This is anticipated to raise an estimated £25 billion over the forecast period.

– Employment Allowance: Raised from £5,000 to £10,500, helping around 865,000 small businesses reduce or eliminate their employers’ NIC liability. the £100,000 threshold for eligibility will be removed. In addition, the government is extending the employer NICs relief for employers hiring qualifying veterans for a further year from 6 April 2025 until 5 April 2026.

Stamp duty

In the Autumn Budget 2024, the Chancellor introduced notable changes to Stamp Duty Land Tax (SDLT), primarily affecting second homes, buy-to-let properties, and first-time buyers:

1. Increased SDLT for Second Properties: Effective from October 31, 2024, the additional stamp duty rate on second homes and buy-to-let properties rises by 2 percentage points to 5% across all tax bands. This change means buyers of second homes or rental properties will face rates starting from 5% on properties valued over £40,000, with the surcharge applying to the entire property value, making ownership costs significantly higher for landlords and investors.
2. First-Time Buyer Relief Adjustments: From April 1, 2025, the threshold for SDLT relief for first-time buyers will revert from £425,000 to £300,000. Additionally, the maximum property price qualifying for this relief will be lowered from £625,000 to £500,000, potentially impacting affordability for those entering the property market.
3. Lower SDLT Threshold for Homeowners: The general SDLT threshold will be reduced from £250,000 to £125,000 from April 2025, reinstating the pre-2022 rate structure for primary residences. As a result, more buyers may need to budget for SDLT when purchasing homes above this threshold.

Capital Gains Tax (CGT)

– Increased Rates for Non-Residential Assets: The lower CGT rate will rise from 10% to 18%, while the higher rate increases from 20% to 24%. These updated rates apply to disposals of non-residential assets, effective from October 30, 2024. For residential property disposals, however, rates remain at 18% (lower) and 24% (higher)​

​- Business Asset Disposal Relief (BADR) and Investors’ Relief: For assets qualifying under BADR and Investors’ Relief, the CGT rate will increase gradually—first to 14% from April 6, 2025, and then to 18% from April 6, 2026. This phased approach aims to support entrepreneurs while aligning with broader CGT reforms​

– Carried Interest Taxation: From April 2025, the CGT rate for carried interest will be raised to 32%, with plans to shift its taxation fully under the Income Tax framework by April 2026. This adjustment aims to standardize tax treatment and close gaps within carried interest taxation

Company car benefits

The percentages for company car benefits will be increased for 2028/29 and 2029/30 as follows:

• Increase of 2% per year for zero emission and electric vehicles.
• Increase to 18% in 2028/29 and 19% in 2029/30 for cars with emissions of 1-50g of CO₂ per kilometre.
• Increase of 1% per year for all other vehicle bands.
• The maximum will also increase to 38% in 2028/29 and 39% in 2029/30.

The government will uprate the Van Benefit Charge and Car and Van Fuel Benefit Charges by CPI from 6 April 2025.

High-Income Child Benefit Charge (HICBC)

Contrary to previous government proposals, the High-Income Child Benefit Charge will not be reformed to consider household income. Instead, it remains based on individual income, maintaining the current structure to simplify assessment and compliance​

Non-Domicile Tax Regime

The non-domicile regime will be abolished from April 2025, transitioning to a residence-based tax system. This change includes a “Foreign Income and Gains” (FIG) allowance, offering 100% UK tax relief on foreign income and gains for new arrivals to the UK during their first four years of residence, provided they have not been UK residents in the prior ten years. Additionally, a Temporary Repatriation Facility will be available, allowing previously non-domiciled individuals to remit foreign income at a reduced tax rate for a limited period

Income Tax and Thresholds

In line with the Labour manifesto, income tax rates remain unchanged for all income brackets. The Autumn Budget 2024 also confirmed that income tax and National Insurance thresholds will stay frozen until April 2028. From then onward, these thresholds will increase annually based on inflation, aiming to protect against “stealth tax” effects as earnings rise over time​

Energy Profits Levy

Starting November 1, the Energy Profits Levy for oil and gas companies will rise from 35% to 38%, with reductions in investment allowances and an extension to 2030, conditional on sustained lower energy prices.

Electric Vehicle (EV) Tax Incentives

Tax incentives for electric vehicles will continue with increased Vehicle Excise Duty for non-electric vehicles from 2025 to encourage green transitions.

Compliance and Tax Collection

To close the tax gap, the government is investing in HMRC’s systems and compliance teams, focusing on debt collection, supply chain compliance, and tax avoidance.

Tax avoidance & Umbrella companies

Measures will be introduced to further clamp down on Umbrella companies and the promoters of tax avoidance schemes, while there will be investment in HMRC to improve systems, increase efficiency and tackle late payment and non-compliance.  

From April 2026, to tackle the significant levels of tax avoidance and fraud in the umbrella company market, the government will make recruitment agencies responsible for accounting for Pay As You Earn on payments made to workers that are supplied via umbrella companies. Where there is no agency, this responsibility will fall to the end client business.

Inheritance Tax

– Extended Freezes on Nil Rate Bands: The Nil Rate Band (NRB) and the Residence Nil Rate Band (RNRB) will remain at £325,000 and £175,000, respectively, until April 2030—a two-year extension beyond the previous freeze ending in April 2028. This prolonged freeze will gradually increase the number of estates subject to IHT as property and asset values rise

– Inclusion of Unused Pension Funds: From April 2027, unused pension funds and death benefits from pensions will be included in an individual’s estate for IHT purposes, aligning the treatment of pension wealth with other assets in the estate

– Reform of Agricultural and Business Property Relief (APR and BPR): Starting in April 2026, the first £1 million of combined agricultural and business property assets will qualify for 100% IHT relief. Any assets exceeding this threshold will only receive 50% relief. Additionally, the rate of BPR for “not listed” shares—such as those on the AIM market—will be reduced to 50%, aimed at discouraging the use of such shares solely for tax advantage.

– New Residence-Based IHT and Offshore Trusts: Beginning in April 2025, a new residence-based IHT regime will take effect, eliminating the use of offshore trusts to shield assets from IHT. The new system broadens the IHT scope, with assets held by UK residents globally becoming taxable, a shift from the previous domicile-based IHT system.

These updates reflect a push toward a more equitable IHT system, ensuring the inclusion of previously exempt assets, while also revisiting relief for agricultural and business property. For more information on how these changes may impact your estate or planning strategies, please get in touch with Naail & Co for a detailed consultation.

Business rates

For 2025/26, eligible retail, hospitality and leisure properties in England will receive 40% relief on their business rates liability. The small business multiplier will be frozen for 2025/26.

Company taxes & capital allowances

The government has published a Corporate Tax Roadmap. The roadmap includes a commitment to cap the Corporation Tax Rate at 25%, maintain the Small Profits Rate and marginal relief at current rates and thresholds and maintain key features such as Full Expensing, the Annual Investment Allowance, R&D relief rates and Patent Box.

The government will extend the 100% First Year Allowances (FYA) for qualifying expenditure on zero-emission cars and the 100% FYA for qualifying expenditure on plant or machinery for electric vehicle charge points for a further year to 31 March 2026 for Corporation Tax purposes and 5 April 2026 for Income Tax purposes.

Private schools

As previously outlined, starting 1 January 2025, all educational services and vocational training offered by private schools in the UK will be subject to the standard 20% VAT. This includes not only tuition but also any boarding services provided by these schools, marking a shift towards standardizing VAT across private educational services.

Additionally, from April 2025, private schools in England will no longer qualify for charitable rate relief on business rates. This change will effectively remove the preferential tax relief these schools previously received.

Interest on late payment of tax

From 6 April 2025, the government will increase the late payment interest rate charged by HMRC on unpaid tax liabilities by 1.5%.

These measures aim to increase government revenue while maintaining fiscal stability in a high-inflation environment. For tailored guidance on how these changes might impact you or your business, feel free to get in touch with Naail & Co for a free initial consultation.