Autumn Budget 2024: At a glance www.rossmartin.co.uk

The Chancellor, Rachel Reeves, presented her 2024 Autumn Budget to Parliament on 30 October 2024. Her key announcements included raising the rates for the National Living Wage (NLW), Employer's NICs, Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT) as well as making Inheritance Tax (IHT) reforms for business property. 

This is our freeview summary pick of our highlights.

We are adding Subscriber Updates to the versions of the links below to provide more insight into the various areas and to provide links to the various policy documents and consultations.

Employer taxes

The rate of employer's National Insurance increases by 2% to 15% and the secondary threshold decreases to £5,000 from £9,100 from April 2025. To ensure that small and micro employers are not adversely affected the Employment Allowance will increase from £5,000 to £10,500.

The National Living Wage (NLW) and National Minimum Wage (NMW) increase from the same date. The NLW main rate increases by 6.7% to £12.21.

In terms of employee motoring benefits, new rates are set for company car benefits and van benefits as well as the fuel charge for fossil-fuelled cars and vans. There are to be some changes made to close loopholes in contrived car ownership schemes. 

Double cab pick-ups will be reclassified as cars from April 2025. There was uproar when HMRC tried to make this change earlier in 2024.

Following an earlier consultation, there will be a tightening of the rules that allow a majority shareholder to obtain 100% CGT and IHT relief when selling out into 'employee ownership' to an Employee Ownership Trust (EOT). Former owners will not be able to sell up and then retain control of the board of trustees. See also CGT for more details.

See Employers: Autumn Budget 2024

Companies

• The government also published the Corporate Tax Roadmap, which aims to restore stability and rebuild business confidence.
• The Targeted Anti-Avoidance Rule (TAAR) in the loans to particiator rules will be updated from 30 October 2024, to apply to arrangements where a group of companies or associated companies use chains of loans to avoid a s.455 charge. 
• Film and high-end TV productions can claim an enhanced 39% rate of Audio-Visual Expenditure Credit (AVEC) on UK visual effects costs, which will be exempt from AVEC’s 80% cap.
• Administrative amendments have been made to the Audio-Visual and Video Games Expenditure Credits. 
• Backdated to 1 April 2023, the calculation of R&D intensity previously did not consider expenditure eligible for Research and Development Expenditure Credit (RDEC), although it was always intended to.
• From 30 October 2024, the cap on benefit for most companies in Northern Ireland claiming Enhanced R&D Intensive Support (ERIS) will be amended from £250,000 to €300,000 and Northern Ireland companies will be required to take into account relevant aid. 

 See, Companies: Autumn Budget 2024 

Capital Allowances

• The availability of 100% First Year Allowances (FYAs) on zero-emission cars and electric vehicle charging points will be extended until 31 March 2026 for Corporation Tax purposes and 5 April 2026 for Income Tax purposes.
• From April 2025, double cab pick-up vehicles with a payload of one tonne or more will be treated as cars for capital allowances.
• A consultation will be launched in the coming months that explores the tax treatment of predevelopment costs.
• The government will explore extending full expensing to assets bought for leasing or hiring when fiscal conditions allow.
• HMRC will continue to work with stakeholders to improve and clarify guidance on areas of uncertainty within the capital allowances system.

See Capital Allowances: Autumn Budget 2024

Capital Gains Tax (CGT)

• The rate of CGT will increase from 30 October 2024:
  • The lower rate of CGT increased to 18%, the higher rate to 24% and the rate that applies to trustees and personal representatives increased to 24%.
  • The lifetime limit for Investors’ Relief will be reduced to £1,000,000. 
• For disposals of trading qualifying assets Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) will increase to 14% on 6 April 2025, and then to 18% from 6 April 2026.
• CGT on carried interest gains will increase from 6 April 2025 to 32%. 
• From 6 April 2026, carried interest will be fully taxed under the Income Tax framework, with tailored rules to reflect its specific nature.
• From 30 October 2024, legislation will be introduced to provide that a tax charge will not arise when a person wishes to use alternative finance to raise capital using an asset they already own.
• Following consultation, there will be changes to the rules that allow a majority shareholder to obtain 100% CGT and IHT relief when selling out into 'employee ownership' to Employee Ownership Trust (EOT), former owners will not be able to sell up and then retain control of the board of trustees.

See Capital Gains Tax (CGT): Autumn Budget 2024

Inheritance Tax

• IHT thresholds will be frozen until 2030. 
• Inherited pensions will be liable to IHT from 2027.
• Agricultural Property Relief (APR) and Business Property Relief (BPR) will be reformed. 
• APR will also be extended to include land managed under an environmental agreement with the government.
• The government aims to invest £52 million in digitalising the IHT system from 2027-28

• From 6 April 2025:

  • As already announced, the current domiciled-based regime will be replaced with a new residence-based regime following the abolishment of the non-UK domiciled rules. 

See Inheritance Tax (IHT): Autumn Budget 2024

Income Tax, Claims and Reliefs

Income Tax allowances and rates remain unchanged for 2025-26 with the following exceptions.

• Married Couple's Allowance for those born before 6 April 1935 increases:
  • Maximum up to £11,270 from £11,080 in 2024-25.
  • Minimum up to £4,360 from £4,280 in 2024-25.
• Blind Person's Allowance up to £3,130 from £3,070 in 2024-25.

The freeze on allowances and rates ends on 5 April 2028.

ISA investment levels remain the same.

Making Tax Digital (MTD) for Income Tax will become compulsory for sole traders and landlords with an income over £20,000 but no timetable has been announced.

See Income Tax, Claims and Reliefs: Autumn Budget 2024

Land & Property

Business Rates reform

• There will be new multipliers set from 2025 to provide Business Rate relief for businesses including the Retail, Hospitality and Leisure sectors.
• Large online retailers will see a rise in their rates multipliers.
• Small businesses will continue to receive a discount on their multipliers.
• A General Anti-Avoidance Rule (GAAR) will be introduced to combat rates evasion.

Annual Tax on Enveloped Dwellings (ATED)

• The ATED annual charges will rise by 1.7% from 1 April 2025.
• Finance Bill 2024-25 will amend the ATED rules for alternative finance arrangements.

Furnished Holiday Lettings (FHL)

• As previously announced by the previous government the Chancellor confirms her government will remove the tax advantages that current FHL landlords have received over other property businesses in four key areas from April 2025.

Landfill tax

• The standard and lower rates of Landfill Tax from 1 April 2025 will be in line with the Retail Price Index

See Land & Property: Autumn Budget 2024 (freeview)

See Land & Property: Autumn Budget 2024 (subscriber update)

Stamp Duty Land Tax (SDLT)

Additional rates for residential property

For transactions with an effective date on or after 31 October 2024:

• There will be an increase in higher rates payable by purchasers of additional dwellings and companies from 3% to 5% above the standard residential rates.
• An increase to the single rate of SDLT payable by companies and non-natural persons acquiring dwellings for more than £500,000, from 15% to 17%. 

From April 2025 thresholds for residential transactions, including residential leases return to their pre-September 2022 levels.

Stamp Duty

A couple of rather obscure amendments:

• The next Finance bill includes an exemption from Stamp Duty and Stamp Duty Reserve Tax (SDRT) for Private Intermittent Securities and Capital Exchange System (PISCES) transactions.
• This scheme for stamping larger retail bottles of high-strength alcohol, typically spirits, is discontinued from 1 May 2025.

See Stamp Taxes: Autumn Budget 2024 (freeview)

See Stamp Duty Land Tax: Autumn Budget 2024 (Subscriber Update)

Overseas & Residence

The following measures in relation to non-resident overseas issues:

• As previously announced, the non-UK domiciled regime will be abolished from 6 April 2025. 
• A new temporary repatriation facility will be available for certain qualifying individuals. 
• The government aims to tackle offshore tax avoidance and non-compliance.
• There are updates to overseas pension transfers. 
• There will be a repeal of offshore receipts in respect of intangible property (ORIP). 

See Overseas and Non-Residents: Autumn Budget 2024

Tax Compliance

• The late payment interest rate charged on unpaid tax liabilities will increase by 1.5 percentage points from 6 April 2025.
• From April 2026, all tax advisers who interact with HMRC on behalf of a client will have to register with HMRC.
• New consultations will be held on:
  • HMRC’s enquiry and assessment powers, penalties, and safeguards.
  • Expanding tax conditionality to new sectors.
  • New ways to tackle non-compliance.
  • Tackling promoters of marketed tax avoidance.
  • Powers to deal with tax advisers who facilitate non-compliance.
  • Making better use of new and improved third-party data.

See Tax Compliance: Autumn Budget 2024

VAT

• From 1 January 2025, Finance Bill 2024-25 will remove the VAT exemption on private school fees.  
• The government will respond to the consultation on the VAT treatment of private hire vehicle services in due course.

See VAT: Autumn Budget 2024(freeview)

See VAT: Autumn Budget 2024 (Subscriber Update)

Charities, Gift Aid

The government is consulting with the charity sector to help tackle non-compliance and protect the integrity of the sector.

A new consultation seeks views on several areas including:

• Tainted charity donations.
• Approved charitable investments.
• Non-charitable expenditure.
• Charity filing obligations.

The government intends that any changes would not detract from the overall generosity of the reliefs or impact on legitimate charities. It notes that the consultation will be of particular interest to Charities and Community Amateur Sports Clubs (CASCs), as well as their donors.

Large Corporates

• Measures affecting Large Corporates proposed during the Autumn Budget 2024 mainly centered around the Multinational Top Up Tax, the Common Reporting Standard and Cryptoasset Reporting Framework (CARF).

See Large Corporates: Autumn Budget 2024

Miscellaneous Taxes

• Plastic packaging tax - chemical recycling and adoption of a mass balance approach - consultation.
• Consultation on the introduction of a UK carbon border adjustment mechanism - consultation.
• Soft Drinks Industry Levy review - Policy Paper.