Posted on: 31/10/2024

News

In presenting Labour’s widely anticipated first Budget in 14 years, the Chancellor was faced with a challenging task.

Following her announcement of a “black hole” in the public finances, the need to renew the Treasury’s coffers while maintaining Labour’s manifesto promises seemed a tall order.

In the event Ms Reeves outlined a programme of around £41 billion worth of tax increases over the next five years, alongside plans to rebuild tottering infrastructure, the health service, schools and more. Any idea of a return to austerity was quashed, but how this will be achieved is very much in the detail.

Among the key headline items were:

• The main rate of class 1 employer national insurance contribution (NIC) will be increased from 13.8% to 15% from 6 April 2025.
• The secondary threshold at which employer NICs are payable will be reduced from £9,100 to £5,000.
• Main rates of capital gains tax increases with immediate effect to 18% for non and basic rate taxpayers and 24% for higher and additional rate taxpayers.
• Inheritance tax (IHT) business and agricultural reliefs will be capped at a total of £1 million from April 2026.
• Unused pension funds and death benefits will be included as part of an individual’s estate for IHT purposes from April 2027.
• The additional SDLT charge for second homes and buy-to-let properties increases from 3% to 5% from 31 October 2024.
• VAT of 20% will be applied to private school and boarding fees from 1 January 2025, while the charitable relief for English business rates will be withdrawn from 1 April 2025.
• ISAs, Junior ISAs and Lifetime ISA limits will remain frozen until April 2030.
• Fuel duty rates for 2025/26 will remain frozen and alcohol rates on certain draught beers will be cut.

As ever the Budget publications contained a wide range of detailed proposals and much to digest. Our Budget Summary highlights the key aspects likely to affect you. If you have any questions about what you should do next, please get in touch.

Download the Autumn Budget