Autumn Budget: The Key Announcements

Chancellor of the Exchequer Rachel Reeves has delivered her first Budget under the newly appointed Labour Government, setting out a vision to restoring economic stability in the UK.

National Insurance Contributions (NIC)

• Employers NIC is set to increase from 13.8% to 15% from April 2025
• The secondary threshold for employers NIC will reduce from £9,100 to £5,000 from April 2025.
• The government is increasing the Employment Allowance from £5,000 to £10,500 and removing the £100,000 threshold, expanding this to all eligible employers.

Capital Gains Tax (CGT)

• The main rates of Capital Gains Tax that apply to assets other than a residential property and carried interest increase from 10% and 20% to 18% and 24% respectively, for disposals made on or after 30 October 2024
• The rate of Capital Gains Tax that applies to trustees and personal representatives from 20% to 24% for disposals made on or after 30 October 2024
• The rate of Capital Gains Tax that applies to Business Asset Disposal Relief and Investors’ Relief from 10% to 14% for disposals made on or after 6 April 2025, and from 14% to 18% for disposals made on or after 6 April 2026.
• The rates of Capital Gains Tax that apply to residential property disposals (18% and 24%) will remain unchanged.
• The higher rates of Stamp Duty Land Tax (SDLT) on purchases of additional residential properties by individuals and purchases of residential properties by companies is to increase from 3 to 5 percentage points above the standard residential rates of SDLT from 31 October 2024. The measure also increases the single rate of SDLT payable by companies and other non-natural persons when purchasing residential properties worth more than £500,000, from 15% to 17%.

Inheritance Tax (IHT)

• Inheritance Tax thresholds are frozen at their current levels for tax years 2028 to 2029 and 2029 to 2030. This measure will fix the following:
  o nil-rate band at £325,000
  o residence nil-rate band at £175,000
  o residence nil-rate band taper, starting at £2 million
• The government has also announced it will reform agricultural property relief and business property relief from 6 April 2026. Relief of up to 100% is currently available on qualifying business and agricultural assets. In addition to existing nil-rate bands and exemptions, the 100% rate of relief will continue for the first £1 million of combined agricultural and business property to help protect family farms and businesses, and it will be 50% thereafter.
• Unspent pensions will be subject to Inheritance Tax from April 2027.

Other

• From April 2025 the National Living Wage will increase to £12.21 per hour for all eligible employees, and the National Minimum Wage for 18-20-year-olds will increase to £10.00 per hour.
• From 2025, the government will allow employed individuals to pay their HICBC through their tax code.
• HMRC will increase the late payment interest rate charged on unpaid tax liabilities by 1.5% from 6 April 2025.
• From 6 April 2025, the remittance basis for non-UK domiciled individuals will be abolished and replaced with a simpler regime.

 

If you have any questions or would like to discuss any of the announcements, please contact our experienced advisors on 01254 688100.