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Autumn Budget 2024
From April 2025, the National Minimum Wage for those over 21, will increase from £11.44 to £12.21 per hour.
For 18 to 20 year olds, the rate will increase from £8.60 to £10.00 per hour.
Employers National Insurance
Employers National Insurance will increase from 13.8% to 15% from April 2025.
The Secondary Threshold from which Employers National Insurance becomes due will be reduced from £9,100 to £5,000.
Employment allowance will increase from £5,000 to £10,500, for small companies with more than one employee.
VAT
VAT will be chargeable at 20% on private school fees from January 2025.
Corporation Tax
Corporation Tax is to be capped at 25% for profits exceeding £250,000, as it currently stands, until the next election.
Benefits
The chancellor confirmed the amount received in benefits will rise by 1.7% in April 2025, in line with inflation.
Carers allowance earnings limit has been increased from £151 to £195 per week to support more full-time carers.
Universal Credit debt repayments will be reduced from 25% to 15% of standard universal credit.
Pensions
State Pension will rise by 4.1% in April 2025.
Non-Dom Tax Status
Non-Domiciled status will be abolished from April 2025.
Other relief will be available for temporary residents.
Capital Gains Tax
The lower rate of Capital Gains Tax will increase from 10% to 18% and the higher rate from 20% to 24% while the rates for residential property will continue to be chargeable at 18% and 24%.
Capital Gains Tax on Carried Interest will increase to 32% from April 2025.
Stamp Duty
Stamp duty on the purchases of second homes, buy-to-let residential properties, and companies purchasing residential property in England and Northern Ireland, will rise from 3% to 5% as of today.
IHT
The Inheritance tax threshold of £325,000 is set to be frozen until 2030.
Inherited pensions will also be subject to Inheritance Tax from April 2027.
Business rates
For eligible businesses in the retail and hospitality sector, the current reduction in business rates will run until April 2025.
From April 2025, some retail, hospitality, and leisure properties will receive a 40% reduction, up to a cap of £110,000.
From April 2026, lower tax rates will be introduced for retail, hospitality and leisure properties.
Business rates relief for private schools will be removed from April 2025.
Duty taxes
Alcohol duty will increase on non-draft products in line with RPI from February 2025. However, a cut of 1.7% to duty on draught alcohol.
Tax on tobacco will increase by 2% above inflation, and 10% above inflation for hand-rolling tobacco.
For vaping products, a flat rate of duty will be applied on all vaping liquid from October 2026, at £2.20 per 10ml.
Air passenger duty is due to increase by a further 50%.
National Insurance Rates
During 2024, there have been the following cuts to National Insurance:
For Employees – From 06 January 2024 – Employees Class 1 NI was cut from 12% to 10% and from 06 April 2024 this was further reduced to 8%
For the Self-Employed – From 06 April 2024 – Class 2 NI was removed and Class 4 NI was reduced from 9% to 8%
Capital Gains Tax
Capital Gains Tax (CGT) applies to the profit which you make when disposing of an asset that has increased in value. From 6th April 2024, HMRC reduced the Annual Exemption for tax-free gains, from £6,000 to £3,000.
Certain Assets and transfers are exempt from Capital Gains Tax. The rates for Capital Gains Tax are 10%/20%, if in the basic/higher rates respectively.
On residential property Capital Gains Tax is payable at 18/28%, if in the basic/higher rates respectively.
Dividend Tax Rates
From April 2024 the tax-free dividend allowance was reduced from £1,000 to £500. Dividend tax rates are as follows:
Basic Rates – 8.75%
Higher Rates – 33.75%
Additional Rates – 39.35%
It’s important for owner manager business to consider tax planning to ensure that they are aware of the tax which will apply to their drawings and consider a tax efficient plan for their drawings.
Spring Budget 2024
During the Spring Budget, Jeremy Hunt made several announcements. We have summarised the main points below:
Income tax
From 06 April 2024 the primary rate of Employees Class 1 NIC will be cut from 10% to 8%, having been reduced from 12% to 10% since 06 January 2024.
From 06 April 2024 the primary rate of Class 4 NIC for the Self-Employed will be cut from 9% to 6%, an additional 2% from the 1% which was already announced in the November budget.
Class 2 NIC is to end on 05 April 2024, offering a saving of £3.45 per week to the self-employed.
Child benefit
The High-Income Child Benefit threshold will increase from £50,000 to £60,000, with full clawback of child benefit applying to individuals with an income of £80,000 or higher. There are plans to move the High-Income Child Benefit threshold to a household income scheme come April 2026.
VAT
There will be a £90,000 VAT registration threshold from 01 April 2024 (increased from the current £85,000) – this is likely to impact smaller businesses and may be worth considering for those who trade with consumers as their prices may be inflated due to the tax liability. However, if choosing to de-register, they will not be able to recover VAT on relevant expenditure.
Property income taxation
The Furnished Holiday Lettings regime will be abolished from 06 April 2025. Properties meeting the qualifying tests for Furnished Holiday Lets are taxed under special rules and can make use of a number of tax advantages such as:
- Plant and Machinery allowances on fixtures, furniture and equipment.
- Capital Gains Tax reliefs such as rollover relief and mitigating Capital Gains Tax on disposals.
- Avoiding finance and interest restrictions on loans and mortgages, applicable to other lets.
The stamp duty land tax multiple dwellings relief is to be abolished for transactions with an effective date on or after 1 June 2024.
Capital Gains Tax on sale of Residential Property
From 06 April 2024, the Chancellor has announced that the higher rate of Capital Gains Tax on sale of Residential Property will reduce from 28% to 24%.
Taxes for non-domiciled individuals (non-doms)
From April 2025 onwards, overseas income and gains will be exempt from UK tax for the first four years of residence. From year five onwards, non-doms will be taxed on worldwide income and gains in the same way as any other UK resident. Transitional measures will ease the change for existing non-doms.
Duty taxes
Alcohol duty will now remain frozen until February 2025.
Fuel duty will be frozen for another year until March 2025.
The Chancellor announced the introduction of a duty on vaping products in October 2026, and a one-off increase in tobacco duty at the same time.
Air passenger duty is due to increase for business and first-class travellers, with the higher rates coming into force from April 2025.
New UK ISA
There will be the introduction of a new UK ISA allowing an additional £5,000 investment (in addition to the current £20,000) in UK businesses. Consultation will continue until 06 June 2024, with further details to be published in due course.
Updated: 11th March 2024
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