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The Autumn Budget 2024

by | Oct 30, 2024 | The Budget | 0 comments

The Autumn Budget 2024

The Autumn Budget 2024

The 2024 Autumn Budget brings changes across wages, business taxes and public spending. Here’s an easy breakdown by category to help you understand what’s new and how it may impact you.

Employers

National Insurance Contributions
  • The government will increase employers’ National Insurance Contributions from 13.8% to 15% and reduce the threshold for NI payments from £9,100 to £5,000.
  • However, smaller businesses can benefit from an expanded Employment Allowance – increased from £5,000 to £10,500 – allowing many to save on NI contributions.
Business Rates Relief
  • The government will replace the 75% business rates discount, previously set to expire in 2025, with a 40% discount up to £110,000 for the leisure, retail and hospitality industry. Although the government expects rates to increase, this relief will help businesses manage costs without drastic hikes.

Employees

National Living Wage
  • The National Living Wage for those over 21 will increase by 6.7%, from £11.44 to £12.21, starting April 2025. This boosts annual earnings for full-time workers (37.5 hours/week) to £23,873.60, up from £22,368.06.
  • For 18 to 20-year-olds, the minimum wage will rise by 16.3%, from £8.60 to £10, raising annual pay for full-time workers to £19,552 from £16,815. However, most in this age group don’t work full-time.
  • Apprentices will see a significant 17.9% increase, with wages going from £6.40 to £7.55 an hour, lifting their annual pay to £14,762 from £12,513.
Carers’ Allowance
  • The Carers’ Allowance will now match the National Living Wage, allowing carers to earn over £10,000 annually without impacting their benefits.
Universal Credit
  • The government will change Universal Credit to reduce the maximum deduction from monthly payments from 25% to 15%, helping 1.2 million low-income households retain more of their benefit each month

Capital Gains Tax and Inheritance Tax

Capital Gains Tax (CGT)
  • Changes to CGT will see the lower rate increase from 10% to 18%, and the higher rate rise from 20% to 24%, affecting profits on assets such as second homes and investments.
Inheritance Tax
  • The government has extended the Inheritance Tax threshold freeze until 2030.
  • From April 2027, inherited pensions will be subject to Inheritance Tax, with certain changes to Agricultural and Business Property Relief applying to estates over £1 million.
  • The government expects these adjustments to generate additional revenue while still offering relief for smaller estates and family businesses.
  • The Nil Rate Band will remain at £325,000 – the same amount since April 2009.

Entrepreneurs and Investing

Business Asset Disposal Relief (BADR)
  • To encourage entrepreneurs to invest in their businesses, Business Asset Disposal Relief (BADR) will remain at 10% this year, before rising to 14% on 6 April 2025 and 18% from 6 April 2026/27.
  • The lifetime limit of BADR will be maintained at £1 million. The lifetime limit of Investors’ Relief will be reduced from £10 million to £1 million.

Additional Budget Information

Affordable Housing and Public Services
  • The Affordable Homes Programme will expand to £3.1bn, supporting new home availability and financing for small builders.
  • Schools will also receive increased funding, with £6.7bn allocated to improve facilities and teacher hiring.
  • Defence spending rises to bolster international commitments.
Environmental and Energy Investments
  • With a goal of becoming a “clean energy superpower,” the government has allocated funds for renewable energy projects, including green hydrogen and carbon capture.
  • Electric vehicle incentives remain, and Vehicle Excise Duty will increase on non-electric cars, supporting environmental sustainability.
Transport and Infrastructure
  • Key rail and road projects, like the Trans-Pennine upgrade and East-West Rail, receive dedicated funding.
  • Additional road maintenance funds will address potholes.
  • The government has extended the £3 bus fare cap for another year, making public transport more affordable.

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