On Wednesday 30 October, Rachel Reeves, the new Chancellor of the Exchequer, delivered Labour’s Autumn Budget 2024.
At the beginning of November, Tax Partners, Tim Cook, Pauline Hudd, Jamie Muirhead and Mark Dawes hosted an Early Riser Review Webcast, giving their technical insights into the various tax measures announced. We have summarised the key measures discussed below.
If you would like to request a copy of the full recording, please contact us here.
Employment Tax Updates
Employers National Insurance
- Employers’ National Insurance rate increased from 13.8% to 15%.
- Threshold reduced from £9,100 to £5,000.
- Small employers benefit from an increased employment allowance from £5,000 to £
National Living Wage (NLW) and National Minimum Wage (NMW)
- NLW is rising by 6.7% to £12,21 per hour from April 2025
- NMW for 18-20-year-olds is increasing to £10.00 per hour, a 16.3% rise
Car Benefit Rates
- Electric car benefit rates to rise from 2% to 9% by 2030.
- Benefit rates for cars with emissions 1-50g Co2/km rising to 19% by 2030.
- Benefit rates for other cars rising 1% in 2028/29 and 2029/30
- Van and fuel benefit rates also uprated
Payroll of Benefits
- Budget confirmed implementation from April 2026
- Compulsory for all benefits except employment-related loans and accommodation (which will be voluntary and likely to be added subsequently).
- Applies to income tax and class 1A NICs
Business Tax Updates
Corporation Tax (CT)
- Corporation tax rates remain unchanged: 19% for small companies with profits under £50,000, 25% for large companies with profits over £250,000
- Marginal rate of 26.5% – profits between £50,000 and £250,000
Capital Allowances
- Annual investment allowance remains at £1,000,000 per annum.
- Full expensing regime remains permanent.
- 50% first-year allowance on special rate pool expenditure
- Consultation on simplifying the qualifying expenditure and predevelopment costs announced.
R&D Tax Credits
- No major changes, but a consultation on pre-application clearance is planned for spring 2025
Limited Liability Partnerships
- Changes to ‘see-through’ treatment for CGT
- Potential tax charge where LLP liquidated or assets disposed of to connected party
- Likely aimed at property business incorporations, but could catch others if unwary
Transfer Pricing
Where are we now?
- Exemptions for small and medium enterprises, but there are still risks
- Formal documentation requirements for the very large organisations
Series of very consequential consultations announced (‘spring 2025’):
- Removing exemption for medium-sized companies
- Possible new reporting requirement for certain cross-border related party transactions
- Removing the formal requirement to transfer price UK-UK transactions
Individual Taxation Updates
Income Tax (IT) and National Insurance (NI) thresholds
These remain frozen until 6 April 2028 at the current rates:
- Personal Allowance: – £12,570
- Basic Rate: – 20% on first £37,700
- Higher Rate: – 40% on next £87,440
- Additional Rate: – 45% above £125,140
Employee NI rates remain unaltered.
Inheritance Tax (IHT) thresholds
The IHT Thresholds have been frozen until 5 April 2028
- Nil Rate Band £325,000
- Residents Nil Rate Band £175,000
- Residents Nil Rate Band Taper continues to start at £2m
IHT - Pension Funds, Business and Agricultural Reliefs
Pension Funds
- Unused pension funds to be liable for inheritance tax from April 2027.
- Pension scheme trustees responsible for reporting and paying the tax.
IHT Business Relief
- £1,000,000 fully exempt, excess taxed at 50% of the main rate from April 2026
- Technical consultation to be published early 2025
IHT Agricultural Relief
From 6 April 2025
- Extension to include land managed under environmental agreement with or on behalf of the UK Government
- This covers land taken out of agricultural production either permanently or for the long term.
From April 2026
- Only £1m fully exempt
- Balance taxable at 50% of the main IHT rate currently 40%
Capital Gains Tax (CGT)
- Effective immediately
- Rates increased from 10% to 18% for basic rate taxpayers, and from 20% to 24% for higher rate taxpayers.
- CGT rates on residential property remain at 18% and 24%
- Investors’ relief lifetime limit reduced from £10 million to £1 million
Business Assets Disposal Relief
- From 6 April 2025 Tax rate to increase from 10% to 14%
- From 6 April 2026 14% to 18%
Private School Fees
Effective 1 January 2025
- VAT @ 20% will be levied on all private school fees
- Prepayment of school fees post-29 July 2024 to be counteracted
Effective April 2025
- Schools which are charities will lose exemption to business rates charitable relief
Non-Dom Regime Overhaul
New Foreign Income and Gains (FIG) Regime
- Replaces the non-dom regime from April 2025.
- First four years of UK residency allow remittance of foreign income and gains tax-free.
- Requires 10 years of non-UK residency to qualify
Temporary Repatriation Facility
- Allows remittance of previously protected income and gains at reduced rates (12% for 2025-2027, 15% for 2027-2028).
- Any such income or gains are to be reclassified as “Overseas Capital”
- After 2027/28 normal UK tax rates will apply on any remitted overseas capital
Overseas Workday Relief (OWR)
- From April 2025, OWR eligibility will be based on employee’s residency not their domicile
- Extended to four years with a cap of 30% of income or £300,000 per year.
Furnished Holiday Lettings (FHL)
Regime to be abolished from April 2025
- 1st April 2025 – Corporate Tax Regime
- 6th April 2025 – Income Tax Regime
FHL income to be assessed as standard rental income going forward.
Stamp Duty Land Tax
Higher Rates for Additional Dwellings
- Surcharge rate increased from 3% to 5% for purchases of additional dwellings.
- Applies to companies and individuals owning more than one property
Businesses
- Applies in all cases where a company is buying UK residential property which is used as part of a genuine property business
- For companies buying residential properties over £500,000 not used as part of a business the previous 15% rate has now increased to 17%
- ATED charges up 1.7% in line with CPI
Individuals
- Applies in all cases where an individual already owns an interest in another property and is not replacing their main residence
- Effective for all transactions entered into on or after 31 October 2024
- Some transitional relief for pre-Budget exchanges
- SDLT threshold will revert to £125,000 from 1 April 2025
- No increase yet to non-resident surcharge
SDLT Rates
| Consideration | Pre-Budget Higher rate | Post-Budget Higher rate | Standard rate |
| Up to £250,000 | 3% | 5% | 0% |
| £250,000 to £925,000 | 8% | 10% | 5% |
| £925,000 to £1.5 M | 13% | 15% | 10% |
| Over £1.5 M | 15% | 17% | 12% |
New rates took effect in respect of all transactions entered into on or after 31 October 2024.
The above rates apply up to 31 March 2025.
