Budget Key Points - Autumn 2024

The Chancellor's recent budget announcement marks a notable shift towards increased public spending and investment in services. This comes with a series of tax changes aimed at funding these initiatives. Here’s a breakdown of the major points that could impact you and your business:

1. Employers National Insurance Increase

Employers will see a rise in national insurance to 15%, with the threshold for payment dropping to £5,000. While this might mean higher costs for businesses, the employment allowance is increasing to £10,500, offering some relief. Unfortunately, this doesn't apply to Limited companies with only one director on payroll.

2. National Minimum Wage Hike

From April 2025, the National Minimum Wage (NMW) will rise to £12.21 for adults and £10.00 for those aged 18-20. This change will directly affect employers with staff on minimum wage, impacting overall expenses.

3. Benefits in Kind (BIK) Payroll Requirement

Starting April 2026, payroll for Benefits in Kind becomes mandatory. Employers with complex BIK arrangements should start preparing, as many payroll systems are ready to handle this transition.

4. Increased Capital Gains Tax

The capital gains tax rate jumps to 18% for basic rate payers and 24% for higher rate payers. Entrepreneurs’ relief will also see increases, reaching 18% by 2026. Those planning to sell assets should consider seeking tax advice.

5. Stamp Duty Surcharge on Additional Properties

Effective immediately, the surcharge for additional properties is now 5%. This will impact property investors and second home buyers.

6. Corporation Tax Stability

No changes to corporation tax rates, including the small profits rate, providing some stability for companies with taxable profits.

7. Making Tax Digital Expansion

The digital tax initiative will continue as planned to sole traders earning over £30,000, with future plans to include those earning over £20,000.

8. Inheritance Tax Changes

From April 2027, unused pension pots will fall within the scope of inheritance tax, alongside new restrictions on agricultural and business property reliefs.

9. Increased Interest on Unpaid Tax

Interest on late tax payments will rise to 9% starting 6 April 2025. Timely tax payments are crucial to avoid this hefty rate.