Summary of the Autumn Budget delivered by the first female Chancellor, Rachel Reeves, on Wednesday 30 October.
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 finances 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 infrastructure, the health service, schools and more. Any idea of a return to austerity was cancelled, 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 Contributions (NICs) will be increased from 13.8% to 15% from 6 April 2025. In addition, the secondary threshold at which Employer NICs are payable will be reduced from £9,100 to £5,000.
- The rates of Capital Gains Tax (CGT) have increased with immediate effect to 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers. CGT on disposals of second homes and buy-to-let properties has not changed and remains at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers.
- Business Asset Disposal Relief (formerly Entrepreneurs Relief) has been retained at the £1 million lifetime limit. However, the CGT rate will increase from the current 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.
- Business property and agricultural reliefs for Inheritance Tax (IHT) will be capped at a total of £1 million from 6 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 Stamp Duty Land Tax (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.
- The personal allowance for 2025/26 will remain at £12,570 and the higher rate threshold will stay at £50,270. The freeze on both will end on 6 April 2028.
- ISAs, Junior ISAs and Lifetime ISA limits will remain frozen until April 2030.
- Fuel duty rates for 2025/26 will remain frozen and duty on certain draught beers will be cut.
If you have any questions about the Autumn Statement’s contents or how any aspects of your tax and financial planning may be affected, please contact us to discuss them.
Martin Mockler FCCA
Partner
Mobile: 07976 421715
Direct Line: 020 8447 3222
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www.evansmockler.co.uk
