Autumn Budget 2024: Essential Updates for Individuals and Businesses

  

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This content has been reviewed by our qualified chartered accountants. However, you should always check with a professional. If you have any questions at all, don't hesitate to get in touch.

Individuals

Employment and Wages 💸

– Minimum Wage Increase: From April 2025, the minimum wage will increase by 6.7% to £12.21 per hour for adults.

– 18-20-Year-Old Minimum Wage: Younger workers’ minimum wage will rise to £10 per hour.

– Carer’s Allowance: The allowance will rise from £81.90 per week to the equivalent of 16 hours at minimum wage per week, equating to over £10,000 annually. [More details from Carers UK] (https://www.carersuk.org/press-releases/carers-uk-welcomes-carers-allowance-earnings-threshold-increase-in-autumn-budget/).

State Pension 📈

– Pension Increase: The state pension is set to increase by 4.1% in the 2025-26 tax year, meaning a £470 rise for UK pensioners, ensuring support aligns with the rising cost of living.

Employee NI, VAT, & Income Tax 💼

– No Increases for Individuals: There will be no changes to National Insurance, VAT, or income tax for employees. However, employers will see several notable changes to their National Insurance obligations, taking effect from 6 April 2025.

Personal Allowance Thresholds 📈

Personal tax thresholds will be indexed to inflation beginning in the 2028-29 tax year, offering relief to workers following an extended freeze.

Inheritance Tax (IHT) Threshold Freeze 🏛️

– IHT Threshold Extension: The current freeze on the Inheritance Tax threshold will be extended until 2030, maintaining the tax-free allowance at £325,000 for estates.


Business

Employer National Insurance & Business Support 🏢

– Employer NI Increase: Contributions will increase from 13.8% to 15% starting April 2025.

– Lowered NI Threshold: The earnings threshold for employer NI will decrease from £9,100 to £5,000.

– Employment Allowance Increase: Employment Allowance will rise from £5,000 to £10,500, meaning 865,000 smaller employers are expected to pay no employer NI next year.

Business and Corporation Tax Changes 💼

– No Increase in Corporation Tax Rates: The Corporation Tax rate will remain capped at 25%, with no increases planned.

– Business Rates Discount: The 75% relief will be replaced with a 40% discount capped at £110,000 from April 2025. [Industry reaction on this change](https://news.completelyretail.co.uk/the-budget-industry-reaction-as-changes-to-business-rates-announced/).

– Tax Fraud & Compliance: HMRC will expand its Making Tax Digital initiative to enforce stricter fraud controls, targeting umbrella companies and tax avoidance. Interest rates for late payments will also increase.


Capital Gains – including selling property

Capital Gains Tax (CGT) Adjustments 📊

– Non-Residential CGT Rate: CGT on non-residential assets will rise from 10% to 18% for basic-rate taxpayers and from 20% to 24% for higher-rate taxpayers. This is an immediate increase, effective from the budget.

– Residential Property CGT: CGT rates on residential properties will remain at 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. This is an immediate increase, effective from the budget.

– Business Asset Disposal Relief: Known as Entrepreneurs’ Relief, the lifetime allowance will remain at £1 million, but tax rates on gains will increase from 10% to 14% in April 2025 and to 18% in April 2026.

We hope you’ve found this concise article helpful & if you’d like to know more specific info just reach out on email or book in a call with one of the team.

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