The UK Labour government's much anticipated first Budget in almost 15 years was delivered by Chancellor Rachel Reeves on Wednesday 30 October. Several tax related proposals were announced which are summarised below.
A more detailed analysis can be found in GMcG Chartered Accountants' Autumn Budget Analysis publication on the GMcG website: Autumn Budget – GMcG Analysis
- Employer NIC on employee earnings – increased rate from 13.8% to 15%; Secondary Threshold (starting point for Employer NIC) reduced from £9,100 per annum to £5,000 – from 6 April 2025
- National Living Wage – increase to £12.21,18-20 year olds to £10.00, Under 18s and Apprentices to £7.55 – from April 2025
- Capital Gains Tax – from 30 October 2024 – lower and higher rates increased to 18% and 24% (previously 10% and 20%); aligning with existing rates for gains on residential property
- CGT Business Asset Disposal Relief/Investors’ Relief – increase to 14% (from 6 April 2025) and to 18% (from 6 April 2026) – currently 10% on qualifying gains
- CGT Business Asset Disposal Relief – lifetime limit remains at £1M
- Investors’ Relief – lifetime limit reduced to £1M (previously £10M) from 30 October 2024
- Inheritance Tax – reduction in Agricultural Property Relief and Business Property Relief – from 6 April 2026. 100% relief for first £1M of combined agricultural/business property; 50% relief in excess of £1M; 50% relief for AIM shares
- Inheritance Tax – unused pension funds and death benefits – liable to IHT from 6 April 2027
- Stamp Duty Land Tax – from 31 October 2024 – increased Higher Rates for Additional Dwellings (HRAD) surcharge – from 3% to 5%
- Stamp Duty Land Tax Rate – temporary reduction expires 31 March 2025 – band from £125,001 to £250,000 will again be taxable at 2% (currently 0%)
- Employment Allowance (Employer NIC) – increase from £5,000 to £10,500 from 6 April 2025 (available to all employers – £100,000 eligibility threshold removed)
- Taxation of non-UK domiciled individuals – from 6 April 2025: abolition of remittance basis, replaced by residence-based regime, 4 year tax exemption foreign income and gains (FIG) for eligible individuals; residence-based system for Inheritance Tax
- Late payment interest (unpaid tax liabilities) – increase rate charged by HMRC on unpaid tax liabilities by 1.5% from 6 April 2025 (current rate 7.5%)
- Inheritance Tax – nil-rate band (NRB) and residential nil-rate band (RNRB) frozen at £325,000 and £175,000 (max) until 5 April 2030
- Capital Allowances – 100% First Year Allowances (FYA) for qualifying expenditure on zero-emission cars/electric vehicle chargepoints, extended to 31 March/5 April 2026
- Other NIC changes from 6 April 2025 – Class 2 £3.50 per week (currently £3.45) and Class 3 £17.75 per week (currently £17.45)
- Van/Van Fuel Benefit charge, Car Fuel Benefit charge – inflationary increases from 6 April 2025
- Double cab pick-ups – treated as cars for certain tax purposes from April 2025
- Company Car taxation – rates to increase from 2028-29 and 2029-30, to incentivise the take-up of electric vehicles
- Corporation Tax – to remain at 25% (main rate)
- VAT on private school fees – confirmed from 1 January 2025 – standard rate 20%
- Making Tax Digital for income tax Self Assessment – extended to those with incomes over £20,000 (timing to be announced)
As many of the announcements are subject to legislation, the details may change during the legislative process and should therefore be kept under review.
Should you require further information on how these changes might impact upon you or your business, please contact any member of the GMcG Tax Team who will be happy to advise.
BELFAST OFFICE: 00 44 28 9031 1113
LYN CANNING HAGAN
Head of GMcG Tax Services
