Chancellor Rachel Reeves presented the Autumn Budget, introducing new measures impacting taxes, household support and business regulations.
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.
