Autumn Budget 2024: Key highlights

In the first Labour Budget since 2010, Chancellor Rachel Reeves promised to “fix the foundations and deliver change”, announcing tax rises worth £40bn.  

Key highlights include:  

Personal taxes 

• No increase to the basic, higher, or additional rates of income tax, Employees National Insurance Contributions (NICs) or VAT.  

• National Minimum Wage to increase to £12.21 per hour for over 21s and to £10.00 per hour for 18-20 year-olds from April 2025.  

• The minimum wage for under 18s and apprentices to increase to £7.55 per hour.  

• The freeze on income tax and National Insurance thresholds to end in 2028. 

• 20% VAT on private schools to be introduced from 1 January 2025 

Business taxes 

• In a measure aimed at raising £25bn, employers will pay National Insurance on workers’ earnings over £5,000 from April 2025 (down from £9,100 currently).   

• The rate of Employers National Insurance will increase from 13.8% to 15%.  

• To support smaller employers, the Employment Allowance (which allows eligible employers to reduce their National Insurance liability) will increase from £5,000 to £10,500 – meaning fewer small businesses will have to pay National Insurance contributions next year.  

• The main rate of Corporation Tax has been frozen at 25%. 

Business rates 

• The small business multiplier and the 40% relief on bills for retail, hospitality and leisure properties (up to a £110k cash cap) frozen until 2026; 

• Permanently lower business rates multipliers for retail, hospitality and leisure properties to be introduced from 2026/27.  

• Business rates charitable relief removed from private schools in England from April 2025.  

Capital Gains Tax (CGT) 

• CGT will increase immediately from 10% to 18% while the higher rate will increase from 20% to 24% 

• The CGT rates for Business Asset Disposal Relief (formerly known as Entrepreneur’s Relief) and Investor’s Relief will rise from the current rate of 10% to 14% from April 2025 and then to 18% from April 2026; 

• Carried interest (a performance related reward for fund management executives) will be taxed fully within the Income Tax framework from April 2026.  Before this, the CGT rates currently applied to carried interest will be increased to 32% from April 2025.  

Inheritance Tax (IHT)

• Current Inheritance Tax thresholds are to be frozen until April 2030; 

• Agricultural Property Relief and Business Property Relief to be reformed from April 2026.  The 100% rate of relief will continue for the first £1m of combined agricultural and business assets and will be 50% thereafter.  

• Business Property Relief will be reduced to 50% for shares designated as ‘not listed’ on a recognised stock exchange (i.e. shares listed on the Alternative Investment Market – AIM Shares) 

• Unspent pension pots will be brought into the scope of inheritance tax from April 2027. 

SDLT 

• The Higher Rates for Additional Dwellings in Stamp Duty Land Tax on the purchases of second homes, buy-to-let residential properties and companies buying residential property will increase from 3% to 5% from 31 October 2024.  

Non doms 

• A new residence-based regime to replace domicile status from 6 April 2025. 

• The use of offshore trusts to shelter assets from Inheritance Tax to be ended. 

• The planned 50% tax reduction for foreign income in the first year of the new regime to be scrapped. 

Energy 

• The Energy Profits Levy (EPL) will be increased to 38% and the 29% investment allowance will be removed.   

• The EPL to be extended to 31 March 2030. 

Travel and transport 

• Fuel duty frozen and the 5p cut to fuel duty on petrol and diesel (which was due to end in April 2025) has been extended for another year – this will save the average car driver £59 in 2025/26. 

• Air Passenger Duty (APD) will be adjusted in 2026/27 – adding £2 per journey for those flying economy to short haul destinations.  

• Air Passenger Duty on private jet flights to go up by 50%. 

• The £2 cap on single bus fares in England will rise to £3 from January 2025. 

• The 100% First Year Allowances for zero emission cars and EV changepoints to be extended for a further year. 

Tobacco and alcohol 

• Alcohol duty on draught produces to be reduced by 1p from February 2025;  

• Alcohol duty on non-draught products will increase in line with the Retail Price Index (RPI) inflation from the same date. 

• Tax on tobacco to increase by 2% above inflation (10% above inflation for hand-rolling tobacco).  

• New tax on vaping liquid introduced from October 2026.  
  
  You can find in depth analysis from the team at Moore Kingston Smith here.   If you need further support or advise on any of the changes announced, please contact your local Moore firm.