Bitesize Autumn Budget Summary

Written by: Matthew Whlean

Here are the key points from Chancellor Rachel Reeves’s “Autumn Budget” 2024:

PERSONAL TAXATION, WAGES AND INCOME SUPPORT

Rates of national insurance and income tax to remain unchanged for the employed and the self-employed.
Rates of VAT to remain unchanged.
Income tax bands and tax free allowance to rise in line with inflation but not until after 2028. These thresholds to remain in place at current levels until then.
Non-dom tax regime for UK residents whose permanent home is overseas, to be withdrawn and replaced with anew residence-based regime from April 2025.
Basic rate of capital gains tax to be increased to 18% (from10%) and to 24% (from20%) for basic rate and higher rate taxpayers from 30 October 2024.
Business Asset Disposal Relief (formerly known as entrepreneurs relief) rates will increase to 14% from April 2025 and again to 18% from April 2026 to align with the basic rate of CGT. Lifetime allowance of £1m remains in place.
CGT rates on the sale of second properties will remain the same and in turn now aligns with gains from all other assets.
Inheritance tax thresholds will remain frozen for a further two years until 2030, however from 2027, unspent pension pots will fall within the realm of inheritance for probate purposes and will be subject to taxation for the first time.
There are also some restrictions applied to the inheritance of agricultural land and property with exemptions made less generous from 2026.

BUSINESS TAXES

Companies / Employers to pay Class 1 Employer National Insurance contributions at 15% (raised from 13.8%) from April 2025 on wages and salaries of over £5k per employee (down from £9,100 in 23/24).
Employment allowance for qualifying smaller entities to be increased form April 2025 from £5k to £10,500. This increase in NI is expected to raise an additional £25Bn per annum of the £40Bn announced in this budget.
Taxes to be raised on profits made by private equity managers to be increased to 32% from 28% in April25.
Main rate of Corporation Tax to remain at 25% on all profits above £250k until next election.

WAGES, PENSIONS & INCOME SUPPORT

Minimum wage to increase from April 2025 to £12.21per hour for over 21’s.(Up from 11.44)representing another 6.7% rise on 23/24.
Minimum wage increases represent a 48.9% increase in wage rates for 21 year olds and above since 2020.
Wage rate for 18-20 year olds to increase to £10 per hour from £8.60 from April 2025, moving towards one rate for all workers irrespective of age.
Triple lock on pensions remains in place. Pensions in turn to increase by 4.1% from 2025.
Carers allowance to increase to enable carers to earn up to £195 a week without impact to benefits (Up from £151).

TRANSPORT, ALCOHOL AND TOBACCO

Cut to fuel duty of 5p to remain in place for another year. Was initially due to end in April 2025.
£2 cap on single bus fares to be increased to £3 from April 2025.(London and Manchester are governed differently and the rates applicable to these places remain at £1.75 & £2respectively).
Government have committed to HS2 investment and tunnelling work in central London to enable the route to travel all the way to London Euston Station.
Further investment announced to upgrade Trans-Pennine rail between York and Manchester, via Leeds and Huddersfield.
Air passenger duty to be increased to £2 for short haul journeys and to £12 for long haul from 2026.
Extra £500m next year to repair pot holes in England.
Vehicle excise duty on non-electric vehicles to double in the first year to promote the move to green energy.
New flat rate of tax of £2.10 per 10ml on Vaping liquid from October 26.
Tax on tobacco to increase by 2% above inflation and 10% above inflation on rolling tobacco.
Tax on non-draft alcoholic drinks to be increased by rate of inflation with tax cut on draught by 1.7%.
Review to be undertaken on sugar tax, carbonated drinks and some milk based drinks for 2025/2026.

PUBLIC SPENDING

Day to day spending on healthcare (NHS) and education to increase by 4.7% in 25/26 with smaller rises in subsequent years.
Defence spending to rise by £2.9Bn in 25/26.
Home office budget to be cut by circa 3% for the next two years, due to assumed savings via asylum system.
Local councils to keep all profits from “Right to Buy” sales from next month (November24) with £1.3Bn extra funding for local councils to be introduced from 2025/2026.

HOUSING

Stamp duty surcharge payable on additional properties to be increased from 3% to 5% from 31st October 2024.
Threshold at which first time buyers will be exposed to stamp duty to reduce to £300kfrom £425k from 31st October 2024.
Point at which buyers pay stamp duty on acquisition of property to reduce to £125k from £250k from April 2025.
Discounts on social tenants buying social property to reduce from 2025 and social housing providers able to increase rent above inflation introduced.

GROWTH, ECONOMY, DEBT & OTHER ANNOUNCEMENTS

The OBR expects the economy to grow by 1.1% for 2024, 2% for 2025 and 1.8% in 2026, with inflation expected at 2.5%, 2.6% & 2.3% respectively.
Definition of government debt to be loosened to enable additional lending and in turn infrastructure investment (items such as future value of student loan debt payments included etc).
Budget policies to increase debt by approximately £19.6Bn in 2024 and an average of £32.3Bn over next 5 years.
Additional spending in England will also match £3.4Bn for Scotland, £1.7Bn for Wales and £1.5Bn for Northern Ireland.

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