Autumn Budget 2024: At a glance

In Labour’s first Budget for more than 14 years, and the first ever by a female chancellor, Rachel Reeves set out plans aimed at restoring economic stability, increasing investment and rebuilding public services. Her statement included what were described as difficult decisions on tax, welfare and spending reductions. The key tax announcements, set to raise £40 billion, are summarised below.

Individuals

Capital gains tax

• The main capital gains tax lower rate has increased from 10% to 18% for disposals made on or after 30 October 2024
• The main capital gains tax higher rate has increased from 20% to 24% for disposals made on or after 30 October 2024
• The rate of capital gains tax on business assets qualifying for Business Asset Disposal Relief (BADR) and Investors’ Relief will increase from 10% to 14% from 6 April 2025 and to 18% from 6 April 2026
• The Investors’ Relief lifetime limit is reduced from £10 million to £1 million for qualifying disposals made on or after 30 October 2024
• The capital gains tax rate on carried interest will be increased from 28% to 32% from 6 April 2025, and from April 2026 carried interest will be taxed under the income tax regime
• From 30 October 2024 changes are being made to the capital gains rules that apply to the liquidation of Limited Liability Partnerships.

Inheritance tax

• The inheritance tax nil-rate band and residence nil-rate band threshold freezes will be extended by two years to 5 April 2030
• From 6 April 2027 unused pension funds and death benefits payable from a pension will be brought into a person’s estate for inheritance tax purposes
• The scope of Agricultural Property Relief will be extended from 6 April 2025 to land managed under an environmental agreement with, or on behalf of, the UK government, devolved governments, public bodies, local authorities, or approved responsible bodies
• From 6 April 2026 Agricultural Property Relief and Business Property Relief will be reformed so that 100% relief will apply to the first £1 million of combined agricultural and business property, with 50% relief for anything above this and to AIM listed shares
• From 30 October 2024 there will be changes to the rules for overseas pensions.

Income tax

• The remittance basis of taxation for non-UK domiciled individuals (non-doms) will be abolished from 6 April 2025 and replaced with a residence-based regime for the first four years of residence
• Income tax and National Insurance thresholds will rise with inflation from 2028-29
• The September Consumer Prices Index (CPI) figure of 1.7% will be the basis for uprating the Class 2 and Class 3 National Insurance contributions and Class 1 Lower Earnings Limit and Class 2 Small Profits Threshold for 2025-26
• Making Tax Digital for Income Tax (MTD ITSA) will be extended to sole traders and landlords with income over £20,000 by the end of the parliament
• From 6 April 2025 the interest payable on unpaid tax will increase by 1.5% percentage points
• Incentives for having electric company cars will continue to some extent until 2030
• The van benefit charge and the car and van fuel benefit charges will be increased from April 2025 using the September 2024 Consumer Prices Index
• The furnished holiday lettings regime will be abolished from 6 April 2025.

Other changes

• Air passenger duty rates for 2026-27 will increase by 13%, and by a further 50% for larger private jets
• The stamp duty land tax (SDLT) surcharge for additional properties will be increased from 3% to 5% above the standard residential rates from 31 October
• From 30 October 2024 changes are being made to certain alternative finance tax rules for capital gains tax, corporation tax, income tax and Annual Tax on Enveloped Dwellings
• VAT will apply to private school fees from 1 January 2025 (for more on this see our guide to VAT on private school fees).

Businesses

• The rates of Class 1, Class 1A and Class 1B employer National Insurance will increase from 13.8% to 15% from 6 April 2025
• The National Insurance secondary threshold will reduce from £9,100 to £5,000 from 6 April 2025 until 5 April 2028
• The National Insurance employment allowance will increase from £5,000 to £10,500 from 6 April 2025
• From 30 October 2024 the taxation of Employee Ownership Trusts and Employee Benefit Trusts are being reformed
• From 1 November 2024 the Energy Profits Levy charged on the profits of oil and gas producers will be increased from 35% to 38%, the 29% investment allowance will be removed, and the levy will be extended until 31 March 2030
• The 100% first-year allowances for zero-emission cars and electric vehicle charge-points are being extended until 31 March 2026 for corporation tax and 5 April 2026 for income tax
• The single rate of SDLT payable by companies and non-natural persons acquiring dwellings for more than £500,000, will be increased from 15% to 17% from 31 October 2024
• For expenditure incurred on or after 1 January 2025, film and high-end TV companies will be able to claim an enhanced 39% rate of Audio-Visual Expenditure Credit (AVEC) on their UK visual effects (VFX) costs and UK VFX costs will be exempt from the AVEC’s 80% cap on qualifying expenditure. Read more about the changes here.
• A targeted anti-avoidance rule aimed at preventing avoidance of the loans to participators rules are being tightened from 30 October 2024
• A Corporate Tax Roadmap has been published, setting out plans for corporation tax and a few other taxes. It includes: capping the headline rate of corporation tax at 25% for the duration of the parliament; keeping the small profits rate and marginal relief at current rates and thresholds; and keeping permanent full expensing, the £1 million annual investment allowance and R&D reliefs.