Introduction
On 30 October 2024, the Chancellor Rachel Reeves, delivered the Autumn Budget. We have made a summary of the key measures impacting limited companies and individuals.
Employer taxes and allowances
Employer’s National Insurance
- National Insurance contributions for employers will increase from 13.8% to 15% from April 2025.
- The secondary threshold at which businesses start paying NI on workers’ earnings will be lowered from £9,100 to £5,000.
- The Employment Allowance will increase from £5,000 to £10,500.
National Living Wage (NLW) and National Minimum Wage (NMW)
- NLW increases to £12.21 an hour from £11.44 (an increase of 6.7%).
- 18-20-year-old NMW rises to £10.00 an hour from £8.60 (an increase of 16.3%).
- 16-17-year-old NMW rises by £1.15 to £7.55.
- Apprentice rate NMW also rises by £1.15 to £7.55.
Capital Allowances
- 100% First Year Allowances on zero-emission cars and electric vehicle charging points will continue until April 2026.
- From April 2025, double cab pick-ups with a payload of one tonne or more will be treated as cars for capital allowance purposes.
Capital Gains Tax (CGT)
The rate of CGT will increase from 30 October 2024:
- The lower rate of CGT increased from 10% to 18%.
- The higher rate of CGT increased from 20% to 24%.
- The rate of CGT that applies to trustees and personal representatives increased from 20% to 24%.
- The lifetime limit for Investors’ Relief will be reduced to £1,000,000.
- For disposals of trading qualifying assets Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) will increase from 10% to 14% on 6 April 2025, and then to 18% from 6 April 2026.
- CGT on carried interest gains will increase from 6 April 2025 to 32% from 18%.
Inheritance Tax
- Inheritance tax thresholds will be frozen until 2030.
- Inherited pensions will be liable to Inheritance tax from 2027.
Income Tax, Claims & Reliefs
Income Tax allowances and rates remain unchanged for 2025-26 with the following exceptions:
Married Couple’s Allowance for those born before 6 April 1935 increases:
- Maximum up to £11,270 from £11,080 in 2024-25.
- Minimum up to £4,360 from £4,280 in 2024-25.
- Blind Person’s Allowance up to £3,130 from £3,070 in 2024-25.
- The freeze on allowances and rates ends on 5 April 2028.
Individual Savings Account (ISA)
- ISA investment levels remain the same at £20,000.
- The outline measure of the British ISA introduced in the Spring Budget 2024 has been scrapped.
Stamp Taxes
Stamp Duty Land Tax (SDLT)
Additional rates for residential property
For transactions with an effective date on or after 31 October 2024.
- There will be an increase in higher rates payable by purchasers of additional dwellings and companies from 3% to 5% above the standard residential rates.
- An increase to the single rate of SDLT payable by companies and non-natural persons acquiring dwellings for more than £500,000, from 15% to 17%.
Main thresholds for residential property
From 1 April 2025
- A 2% rate of SDLT will apply to residential property with a value of £125,000-£250,000.
- The 5% rate will continue to apply to residential property valued at £250,001-£925,000.
SDLT relief: First-Time Buyers (FTB)
From 1 April 2025
- The threshold for FTB relief reduces: FTBs receive a 5% discount on the purchase of a home costing £250,000 – £425,000 from 1 April 2025 (it was £250,000 – £625,000).
SDLT Residential Leases
From 1 April 2025
- The threshold at which SDLT is charged reduces from £250,000 to £125.000.
Overseas and Residence
The current non-UK domiciled regime which allows for income to be taxed on a remittance basis for non-UK domiciled taxpayers will be abolished and replaced with a new regime based on residence status.
From 6 April 2025:
- 100% tax relief will be available for new arrivals to the UK on their foreign income and gains.
- The relief will be available for the first 4 years of their UK residence provided they have not held residence within the UK in any of the 10 consecutive years prior to their arrival in the UK.
- For past remittance basis users, foreign assets will be rebased at 5 April 2017 for capital gains tax (CGT) purposes.
- Foreign income and gains arising prior to 5 April 2025 will continue to be taxed under the remittance basis rules even if the individual is eligible for the new 4-year regime.
- The current domiciled based inheritance tax (IHT) system will be replaced with a residence based system.
- A temporary repatriation facility will be available for individuals who have previously claimed using the remittance basis.
This facility will:
- Only be available for a transitional period of 3 years.
- Allow individuals to be able remit income and gains arising before 5 April 2025 at a reduced rate.
- Be available at 12% for the first two years and 15% for the last year.
Other
- The VAT exemption on private school fees will be removed from 1 January 2025.
- The late payment interest rate charged on unpaid tax liabilities will increase by 1.5% from 6 April 2025.
- Fuel duty will remain frozen for another year.
- There will be an introduction of a flat-rate duty on all vaping liquid from 2026, and a one-off increase in tobacco duty.
- Increase of the rate of air passenger duty by 50% for private jets.
- A £3 bus fare cap will be extended for a further year, to December 2025. This has risen from £2 for a single trip fare.
- Draught duty cut by 1.7%, taking a penny off pints in pubs.
