Budget – Highlights Autumn 2024

  1. 1.2% increase to National Insurance contributions – From April 2025, there will be an increase to the amount of National Insurance (NI) contributions an employer must make. NI Contributions will increase by 1.2% to a total of 15%, and the National Insurance primary threshold – which is when employers begin to pay NI, will be lowered from £9,100 to £5,000.
  2. Freeze on the Income Personal tax threshold will end in April 2028 – The Chancellor confirmed that the freeze on income tax and National Insurance thresholds will end in April 2028. From 2028 – 29, personal tax thresholds will be updated in line with inflation.
  3. Changes to the minimum wage – The National Living Wage for workers over 21 will increase by 6.7% in April 2025 to £12.21 per hour, which is worth an extra £1,100 per year for a full-time worker. Meanwhile the National Minimum Wage for 18 to 20-year-olds will go up by 16% to £10 per hour.
  4. Update on business rates – The current 75% discount on business rates is set to expire in April 2025, this will be replaced by a discount of 40% (maximum discount of £110k). In addition, there is a plan to introduce permanently lower business rates for high-street retail, hospitality and leisure properties from 2026-27.
  5. Corporation tax – The main rate of Corporation tax for businesses with taxable profits under £50,000 will remain at 19% and taxable profits over £250,000 will remain at 25% until next election.
  6. Capital Gains Tax – Capital Gains tax rates for disposal on or after 30 October 2024 will increase from 10% to 18% and the higher rate from 20% to 24%. The rate for Business Asset Disposal Relief and Investors’ Relief will increase to 14% from 6 April 2025, and will increase again to match the lower main rate at 18% from 6 April 2026.
  7. HMRC changes – The interest rate applied will increase on tax that is overdue to encourage prompt payment, in addition there will be an increase in HMRC criminal investigation work by hiring more compliance officers.
  8. Making Tax Digital for Self-Assessment update – There was a Making Tax Digital (MTD) update within the budget, and the Labour government reiterated its commitment to delivering on the current timeline and expanding the rollout for sole-traders and landlords with an income over £20,000 per year. Compliance will include, keeping records digitally, via HMRC compatible software and report quarterly income and expenditure to HMRC – instead of just once a year. Key Dates are as follows;
    • business owners and landlords with a total business or property income above £50,000 per year. These individuals will have to follow MTD rules from 6th April 2026.
    • business owners and landlords with a total business or property income above £30,000 per year. These individuals will have to follow MTD rules from 6th April 2027.
    • business owners and landlords with a total business or property income above £20,000 per year. These individuals will have to follow MTD rules from 6th April 2029 – yet to be confirmed for certain.
  9. IHT business and agricultural reliefs – current 100% tax relief still remains up to the first £1 million, sadly reducing to 50% of tax relief above the £1million threshold.

 

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