UK Autumn Budget 2024

The UK 2024 Autumn Budget, introduced by Chancellor Rachel Reeves, delivered a mix of policies directly impacting small businesses. It emphasizes fiscal stability and growth-oriented incentives while raising revenue through selective tax increases. Here’s an overview of what business owners can expect from this year’s budget.

Small businesses will see stability in key tax rates such as fuel duty, income tax, National Insurance, and VAT, which remain unchanged. However, some industry experts are concerned about "fiscal drag" from the freezing of personal tax thresholds, meaning that as inflation increases incomes, more business owners and employees will enter higher tax brackets over time.

While there was no rollback of recent corporation tax increases, there is a continued commitment to maintaining the basic rate at 19% for small firms, capped at 25%, though there are calls to further support small business owners by revising the marginal tax thresholds and expanding the £50,000 limit for lower rates.

The government have also announced a new COVID taskforce, creating more jobs for HMRC officers and allowing more time to be spent checking over false COVID-19 support given, along with bounce back loan fraud.

Below is a summary of the main tax and spending increases announced in the budget:

• Minimum Wage Increase

  • New rates apply from April 2025

    • 21+ - £12.21 per hour (6.7% increase)

    • 18 - 20 - £10 per hour (16.3% increase)

    • Apprentice - £7.55 per hour (18% increase)

• Employers National Insurance

  • New rates apply from April 2025

    • Increased from 13.8% to 15%.

    • Employment Allowance increased from £5,000 to £10,500

    • Starting threshold reduced from £9,100 to £5,000.

  • Speak to us about using our calculator to see how this will affect you.

• Capital Gains Tax

  • New rates apply from 31/10/2024

    • Main Capital Gains Tax rates have changed to match the residential property rates

    • 18% lower rate

    • 24% higher rate

• Inheritance Tax

  • From 6th April 2026

    • The first £1 million of combines business and agricultural assets will continue to attract no IHT. Assets above this threshold will have IHT applied with 50% releif (a 20% effective tax rate).

  • From 2027

    • Pensions will no longer be free from inheritance tax

• Business Asset Disposal Releif

  • From 2025

    • Increases to 14%

  • From 2026

    • Increases to 18%

• Stamp Duty

  • New rates apply from 31/10/2024

    • Stamp duty on a second property increased from 3% to 5%.

• Changes to the Treatment of Double Cab Pick-ups (DCPUs)

  • Changes Apply from 1st April 2025

    • Currently, Double Cab Pick-ups (DCPUs) which can carry more a payload of one tonne or more, are classified as plant and machinery, however, from 1st April 2025, any DCPU, regardless of payload, will be classified as a car, therefore changing the capital allowances and benefit in kind tax liabilities. The existing capital allowances treatment will apply to those who purchase DCPUs before April‌‌‌ 2025.

The UK autumn 2024 budget has marked some of the biggest changes to taxation in our generation. We will stay up to date with all changes and endevour to provide peace of mind to our clients, so you can focus on making your business successful!