Autumn Budget 2024: What were the Chancellors' Key Announcements?

Autumn Budget 2024: What were the Chancellors’ Key Announcements?

Today (30th October 2024), Chancellor Rachel Reeves delivered the new Labour government’s first Budget. Our latest article summarises the key announcements in the Autumn Budget 2024.

Overview of the Autumn Budget 2024

The Chancellor announced that the Autumn Budget aims to fix the foundations of the economy and deliver change by protecting working people, fixing the NHS and rebuilding Britain. The Government delivered its growth mission by prioritising investment, stability, and reform to drive prosperity across the UK. The Budget sets out intentions to put the public finances on a sustainable path to create the conditions for growth.

Please visit the Government’s website to read the full Autumn Budget 2024.

Key announcements in the Autumn Budget 2024

Employers National Insurance

From April 2025, Employer National Insurance contributions will rise by 1.2 percent, increasing the contribution rate from 13.8 percent to 15 percent. The threshold at which employers start paying National Insurance on a worker’s earnings will also be lowered from £9,100 to £5,000.

Income Tax

The Government will not extend the freeze on Income Tax and National Insurance thresholds beyond 2027/28, saying it would “hurt working people” to keep thresholds frozen.

The Chancellor also announced that National Insurance, VAT and Income Tax will not increase for working people in this Budget.

National Minimum Wage

The national minimum wage will rise by 6.7 percent to £12.21 an hour for those over 21 and to £10 per hour for 18 to 21-year-olds. The Chancellor said the Government will move to a single minimum wage level, which will mean a flat rate for those 18 and above.

Capital Gains Tax

Capital gains tax will increase, with the lower rate rising from 10 percent to 18 percent and the higher rate rising from 20 percent to 24 percent.

Stamp Duty

The stamp duty land tax surcharge for second homes will increase by two percentage points to five per cent.

Inheritance Tax

Inheritance tax thresholds will be frozen for another two years until 2030. Inherited pensions will be subject to inheritance tax from April 2027, with changes to agricultural relief. The measures aim to raise over £2 billion a year.

Corporation Tax

The main rate of Corporation Tax, which is paid by businesses with taxable profits over £250,000, is set to remain at 25% until the next election.

Pensions

The Chancellor reiterated the Government’s commitment to the pension triple lock, telling Parliament that the basic and new state pensions will rise by 4.1 percent in 2025-26.

Schools and education

VAT on private school fees will be introduced in January 2025, and legislation soon will remove their business rates relief in April 2025.

The Chancellor has pledged £1.4bn to rebuild more than 500 schools as part of a 19 per cent real-terms increase in the Department for Education’s capital budget, along with £2.1bn for school maintenance.

The core schools budget will rise by £2.3bn next year, with an extra £1bn funding increase for special educational needs provision. Investment in breakfast clubs will also be tripled.

Business Asset Disposal Relief

£1 million Business Asset Disposal Relief to be retained but at an increasing rate.

Business rates

Business rates—The existing 40% on business rates for the retail, hospitality, and leisure industries will continue in 2025/6, up to a cap of £110,000 per business.

On business rates, from 2026-27, the Treasury intends to introduce two permanently lower tax rates for retail, hospitality and leisure properties, paid for by a higher multiplier for the most valuable properties.

Tax avoidance

The Government hopes to raise £6.5bn by giving HMRC new technology and hiring extra staff to crack down on £6.5bn in unpaid taxes and tackle tax avoidance schemes.

Housing

The Government will invest more than £5bn in housebuilding and £1bn of funding to remove dangerous cladding next year. A new housing package will deliver up to 5,000 new affordable social homes and provide £500 million in new funding for the Affordable House Programme.

Carers Allowance

The weekly earnings limit for carers’ allowance will rise to the equivalent of 16 hours a week at the national living wage. This is the largest increase since the allowance was introduced.

Compensation

Rachel Reeves announced that the Government will set aside £11.8 billion to compensate those affected by the infected blood scandal and £1.8 billion to compensate victims of the Post Office Horizon scandal.

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