Autumn Budget Response 2024

With all of the speculation leading up to the autumn budget and the many predictions for what the first Labour government budget in 14 years would bring, it is a relief to have details finally of how Rachel Reeves intends to fill the much talked about black hole in the public finances.

To raise the required £40bn one of the major taxes had to rise. Employers' NIC was the only option left open to the chancellor following Labour's manifesto pledge not to raise Income Tax, National Insurance and VAT for working people. It was therefore little surprise that the Employers' NIC rate is being increased to 15% from April 2025.

The widely expected increase in Capital Gains Tax comes into immediate effect, but the top rate increase from 20% to 24% is lower than many had been predicting.

Changes to Inheritance Tax include the removal of the exemption for inherited pension funds and the scaling back of business property and agricultural property relief. We also have further clarification regarding the change to the rules for non-domiciled individuals.

The chancellor confirmed that private school fees will be subject to VAT at the standard rate of 20% with effect from 1st January 2025. Private schools will also lose entitlement to business rates relief.

Individual and corporate landlords are facing another increase in Stamp Duty Land Tax with the higher rate for additional dwellings being increase from 3% to 5% effective from 31st October.

The key message of "restoring economic stability" was clearly present in the Corporation Tax Road Map published alongside the budget with promises to cap the Corporation Tax rate at 25% for the lifetime of the parliament, maintaining the current capital allowances and R&D reliefs and ensure the UK's regime remains internationally competitive.

For details of the budget announcements see our budget summary below: