Autumn Statement 2024

On the 30 October, the Chancellor, Rachel Reeves announced the Autumn Budget. Here's a few points raised and the impact it may have on you, your family and business.

Business

Changes in National Insurance are likely to have an impact on employee investment and growth, potentially pushing many to an outsourced or tech-based solution for their labour needs. Conversations have already indicated that salary increases for many SME’s after many years of steady increases for employees may stall.
Increases in Business Asset Disposal Relief (BADR) are gradual (from April 2025 and 2026) and may drive deals to happen quicker but the increase in rates is unlikely to deter the SME sector from selling and de-risking their (likely) main assets.
Sales of shares to Employee Ownership Trusts (EOTs) have now clarified (or introduced) rules relating to control and valuations – the impact of these changes take effect from today.
The Capital Gains Tax (CGT) increases took effect from today and have a modest impact at 4%, but this will likely require adjustments to valuations.
Investment and capital relief on investments in business will hopefully stimulate large scale projects and improvements to business infrastructure.

Employers / Employees

The National Minimum Wage (NMW) will increase with effect from 1 April 2025. For those aged 21 and over NMW will increase from £11.44 to £12.21, for those between 18 and 20 the increase is from £8.60 to £10 and for apprentices the increase is from £6.40 to £7.55.
Employers’ National Insurance (NI) contributions will increase from 13.8% to 15% and the threshold at which businesses start paying NI on workers’ earnings will be lowered from £9,100 to £5,000. NI for employees remains unchanged.

Property & Construction

Capital Gains Tax – lower rates will increase from 10% to 18%, and higher rates will increase from 20% to 24% effective from today (30 October 2024). These new rates will match the residential property rates, which are not changing.
Stamp Duty Land Tax (SDLT) – The higher rate surcharge on additional residential properties will be increased by 2% to a total of 5%. The Annual Tax on Enveloped Dwellings annual charge will rise by 1.7% from 1 April 2025 in line with the Consumer Price Index. There will also be an increase to the single rate payable by companies acquiring dwellings for more than £500,000 from 15% to 17%. These changes will apply to transactions with an effective date on or after 31 October 2024.
Retail, Hospitality & Leisure – this sector will be entitled to a 40% relief in business rates from 2025-26, capped at £110,000 per business. This will hopefully make investment into commercial property within this sector more attractive.
Housebuilding – £5bn will be invested into this sector as the government works towards delivering their housing plan of 300,000 homes per year. The Affordable House Program will have a £3bn injection in support and guarantees which is to be aimed at small housebuilders improving the supply of homes.

Private Wealth & Family

Capital Gains Tax (CGT) - CGT rates on property remain unchanged. For disposals of non-property assets the lower rate has increased from 10% to 18% and the higher rate from 20% to 24%.
Inheritance Tax (IHT) - Thresholds remain frozen until 2030.
Agricultural Property Relief (APR) and Business Relief (BPR) - reform from April 2026, the current 100% rates of relief will apply to the first £1 million of applicable assets in addition to the existing nil rate bands. There will be a 50% relief on AIM shares, amounting to Inheritance Tax rates of 20%.
Non-Dom Regime - will be abolished in April 2025. We move to a residence based tax regime.
Private School Fees - VAT is to be introduced from January 2025, while business rates relief will also be removed from private schools in April 2025.
Stamp Duty Land Tax (SDLT) - the second home surcharge increases by 2% from 31st October.
Carers Allowance - Carers can now earn the newly increased minimum wage for 16 hours per week before losing any benefits, this amounts to approximately £10,000 per year.