On 30 October 2024, Chancellor Rachel Reeves announced the Autumn Budget for “national renewal.The new Budget offers some support for low-income workers but considerable tax increases on businesses and higher earners. Here are the main takeaways:  

National Insurance Contributions:

  • Starting 6 April 2025, employers will pay a 1.2% increase in National Insurance contributions (NIC), from 13.8% to 15%.  
  • The threshold for employers’ NIC will be lowered to £5,000 from the previous £9,100, effective from 6 April 2025 to 5 April 2028.  

Autumn Budget 2024

Capital Gains Tax: 

  • Capital gains tax rates for shares disposals will increase from 10% to 20%, rising to 18% and 24%, applicable from 30 October 2024. The rates for capital gains on second homes will remain unchanged.  

Income and Inheritance Tax:

  • There are no modifications to income tax in the current Budget. However, personal tax thresholds are set to be adjusted for inflation starting in the 2028-29 tax year.  
  • The inheritance tax threshold will remain frozen until 2030, whilst newly established rules will apply to inherited pension pots.  

Minimum Wage Adjustments:

  • The national living wage for individuals aged 21 and older will experience a 6.7% increase, bringing it to £12.21 per hour.  
  • Meanwhile, the national minimum wage for those aged 16-20 will rise by 16.3% to £10 per hour. 

Education Sector Changes:

  • Beginning in January 2025, private schools will lose their VAT and Business Rates exemptions.  

Public Investment Overview:

  • The government has earmarked over £100 billion for investment in infrastructure, education, and healthcare within the next five years.  
  • The Department for Education is set to receive £6.7 billion for capital investments, along with £1 billion allocated for special educational needs and a £22.6 billion increase to the health budget.  

Regulatory Updates:

  • New regulations will be implemented to tackle tax avoidance, targeting a revenue generation of £6.5 billion, along with compensation initiatives for victims of previous government missteps.  

Future Economic Projections:

  • The Chancellor reiterated a commitment to achieving a 2% inflation target through the Bank of England and introduced stricter borrowing protocols for everyday expenditures, aiming for balanced budgets in the foreseeable future.  

This Budget outlines Labour’s strategy for revitalizing the UK’s economy and public services, signaling a shift from prior Conservative policies towards increased investment, growth, and stability. Stay updated on the latest tax changes with Legend Fusions! 

Reviewed by:
Junaid Usman

Apart from being a partner at Legend Fusions, Junaid is an expert on Business Tax including business management advisory services which has proven in the growth of company. He is a promising advisor with an ideology; “Any business success depends on the level of objectivity it maintains.”

Leave a Reply

Your email address will not be published. Required fields are marked *

This field is required.

This field is required.