Chancellor’s Autumn Budget 2024 – Summary and Highlights
Rachel Reeves’s first Budget, presented on October 30, 2024, is a significant tax-raising plan, collecting approximately £40 billion to support public finance recovery and fund national renewal programs. Key highlights include:
- Taxes and Thresholds: A substantial rise in National Insurance Contributions (NIC) for employers, an increase in the Capital Gains Tax (CGT) rates from 10% to 18% for lower bands and from 20% to 24% for higher bands, and frozen tax allowances lasting until 2028. Business Asset Disposal Relief rates will also climb, doubling from 6% to 14% in April 2025.
- Minimum Wage and Employment Regulation: The national minimum wage will increase to £12.21 per hour by April 2025, while employers’ NIC rates will see a 1.2% increase, placing additional financial pressures on businesses. The Employment Allowance will be raised to £10,500, while new regulations are set to curb tax avoidance schemes and oversee umbrella companies.
- Property and Corporate Taxation: Changes to Stamp Duty Land Tax (SDLT) include a higher surcharge for second homes, while the Corporate Tax will remain at 25%. The government will publish a new corporate tax roadmap to support business clarity. The controversial non-domicile tax regime will be abolished in 2025.
- Inheritance and Other Duties: Inheritance tax (IHT) thresholds remain frozen until 2030, with some modifications in pension inheritance and reduced benefits in business property relief. Air passenger duty on private jets and tobacco duty will rise, in line with inflation.
- Spending and Social Programs: The Budget prioritizes increased funding for the NHS, social support for economically inactive individuals, skills development, welfare fraud reduction, and assistance programs for vulnerable groups. Defense spending will increase to eventually reach 2.5% of GDP, with dedicated funding for Ukraine. A £70 billion National Wealth Fund has been allocated for long-term investments, and the state pension and pension credit will see a 4.1% increase in 2025.
Summary: Rachel Reeves’s Budget introduces extensive tax increases and spending plans, with significant measures for businesses and individuals. While it aims to reduce national debt and support economic growth, the burden on businesses and middle-income earners is set to rise through increased NICs, CGT rates, and frozen allowances, potentially impacting employment and wage growth.
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