Chancellor Rachel Reeves presented the Autumn Budget on 30 October 2024, outlining significant changes across various financial sectors.
Personal Tax
- Income Tax: The Chancellor maintained current income tax rates and thresholds, aligning with Labour’s commitment not to increase taxes on typical workers.
- Savings: No changes were announced regarding taxation on savings interest.
- Pensions: The state pension is set to rise by 4.1% in April 2025, increasing the full rate from £11,502.40 to £11,975 annually, following the triple lock system.
- Non-UK Domiciled Individuals: No specific measures targeting non-domiciled individuals were introduced.
Employment
- National Insurance: Employers’ National Insurance contributions will increase by at least one percentage point, raising approximately £8.5 billion. Additionally, the earnings threshold for employer contributions will be reduced from £9,100. To support smaller businesses, the Employment Allowance will rise from £5,000 to £6,000, benefiting about a million small employers.
- Company Cars: No new measures affecting company car taxation were announced.
- National Living Wage: The National Living Wage will increase to £11.44 per hour, enhancing income for low-paid workers.
Business
- Corporation Tax: The current Corporation Tax rate remains unchanged, consistent with Labour’s election promises.
- Capital Allowances: No significant alterations to capital allowances were introduced.
- Business Rates: The Chancellor pledged to overhaul the business rates system to support small businesses, with potential reforms including basing rates on land value rather than rental costs.
Capital Taxes
- Capital Gains Tax (CGT): Speculation suggests potential reforms, including the possibility of scrapping the current £3,000 tax-free allowance and extending CGT to additional assets.
- Inheritance Tax: Reforms may include increasing taxes on large land holdings, though specific details were not provided.
Other Matters
- Value Added Tax (VAT): No changes to VAT rates or thresholds were announced.
- Stamp Duty Land Tax (SDLT): The Chancellor is considering reforms to the Stamp Duty system, potentially shifting to an annual land value tax to encourage housing market mobility.
These measures aim to address the £22 billion shortfall in public finances and lay the groundwork for economic stability and growth amid challenging financial circumstances.
