Autumn Budget 2024.

An overview of the Autumn Budget’s impact on our clients, focusing on tax changes for Business.

After months of speculation, the hotly anticipated Autumn Statement has delivered by the new Chancellor. Warnings of a “painful” budget were perhaps overstated for many individuals, but they certainly rang true for businesses.

Spending is going up. Taxes are going up. Borrowing is going up. On the other side the Government has promised to Invest Invest Invest in public services.

While personal tax and corporation tax remains unchanged, please read below the main alterations outlined in the budget.

Employers National Insurance

This was perhaps the most important change for our clients is Employers National Insurance will increase from 13.8% to 15% form April 2025, and just as significantly employers  will see their Secondary threshold drop to £5000 per annum.

This will prove a costly measure for many employers, especially those who employ a lot of part time staff, the changes come in April 2025. On average our clients could face having to pay an additional £615 per employee per year, on the living wage.

Capital Gains Tax (CGT) Rates

Capital Gains Tax rates are rising from 10% and 20% to 18% and 24%, respectively, starting October 30, 2024.

Business asset disposal relief, remains at £1 million and 10 per cent this year, before rising to 14 per cent in April 2025, and to 18 per cent from 2026/27.

These changes affect our clients when selling rental properties or their business.

Inheritance Tax Adjustments

Inheritance tax reforms will bring unused pension funds and death benefits into an estate’s taxable value by April 2027.

Stamp Duty Increase for Additional Properties

The Higher Rates for Additional Dwellings (HRAD) surcharge on Stamp Duty Land Tax will rise from 3% to 5% on October 31, 2024. This will impact landlords and property businesses.

Minimum Wage

The National Living Wage, for employees aged 21 and over, will rise from £11.44 an hour, to £12.21. If they are aged 18, 19 or 20, the National Minimum Wage will go up from £8.60 an hour, to £10 from April 2025.

HMRC improvements

The government re-affirmed its commitment to hiring an additional 5,000 compliance and 1,800 debt recovery individuals within HMRC, meaning tax compliance should be at the forefront of all businesses over the next few years.

Umbrella companies

The government has committed to tackling non-compliance within umbrella companies and is seeking to impose measures which will push responsibility (and potential liability) up the chain to the party engaging the umbrella company. 

With so many tax changes announced, many business would be forgiven for not noticing any of the positive  provisions.

Increase to Employment Allowance

To help smaller businesses (business who pay less than £100k in class 1 national insurance in a year), the Employment Allowance will increase from £5,000 to £10,500.

Fuel Duty Frozen for Next Year

Fuel Duty will freeze and maintain the existing 5p cut for another year too. There will be no higher taxes at the petrol pumps next year.

R&D tax relief

There were no significant legislative changes to the R&D tax relief regime in the Autumn Budget.

Since the widespread error and fraud in claims was flagged by the mainstream media in late 2022, HMRC have significantly increased their compliance efforts whilst recent legislative changes by the previous government have reduced the value and attractiveness of the scheme.

Self-employed status

While employers, umbrellas and engagers were hot on the agenda, the self-employed status and single worker status reforms were notably absent from the budget report – with so many priorities in play it would seem, for now at least, the law on self-employed status will have a reprieve.

Business Rates Relief

Eligible retail, hospitality, and leisure properties in England will receive a 40% discount on their business rates in 2025-26, capped at £110,000. For larger properties, sector-specific business rate multipliers will be introduced in 2026-27.

The Partners and Staff at Adams Moore