Key changes for businesses
Employer National Insurance contributions
Employer NICs will increase from 13.8% to 15% starting April 2025, with the earnings threshold dropping from £9,100 to £5,000. The Employment Allowance will increase to £10,500, eliminating the previous £100,000 eligibility threshold.
Business rates relief for retail, hospitality, and leisure
The current 75% business rates relief, capped at £110,000, will continue until April 2025 but will reduce to 40% for the 2025/26 tax year. From 2026, lower business rates multipliers will apply to properties in these sectors.
Growth sector investment
£975 million over five years is allocated to the aerospace sector, £2 billion to the automotive sector, and £520 million for the Life Sciences Innovative Manufacturing Fund. The Budget provides £15 billion in tax reliefs for the creative industries over the next five years.
Household support
National Living Wage increase
The National Living Wage will rise by 6.7% to £12.21 per hour from April 2025, impacting over 3 million low-paid workers. Minimum wage rates for 18-20-year-olds will rise by 16.3% to £10 per hour.
State pension and working-age benefits
The State Pension will increase by 4.1% in line with the Triple Lock commitment and working-age benefits will rise by 1.7% to match the September CPI inflation rate.
Household support fund expansion
An additional £1 billion has been allocated to extend the Household Support Fund and Discretionary Housing Payments in 2025/26, supporting local councils in providing targeted financial aid.
Taxation reforms
Capital Gains and Inheritance Tax adjustments
Capital Gains Tax rates will rise, with the lower rate increasing from 10% to 18% and the higher rate from 20% to 24%. Inheritance Tax thresholds will remain frozen until 2030, and from April 2027, unused pension funds will become subject to IHT.
VAT on private school fees
Starting 1 January 2025, private education and vocational training services provided by private schools will be subject to 20% VAT. Business rates relief for private schools will also be removed from April 2025.
Stamp Duty changes for additional properties
The Higher Rates for Additional Dwellings (HRAD) surcharge will rise from 3% to 5%, and the SDLT rate for corporate bodies on properties over £500,000 will increase from 15% to 17%.
Read the full Autumn Budget 2024 Report to learn more about the latest fiscal changes and implications for individuals and businesses.
