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Autumn Budget Summary

Here is a summary of the main changes announced in the Autumn Budget.  We have focussed on the issues that we believe are most relevant to our clients.

INDIVIDUALS

• CAPITAL GAINS TAX

For disposals on or after 30 October 2024

• Basic rate increases from 10% to 18%
• Higher rate increases from 20% to 24%
• Gains on residential property continue to be taxed at 18% and 24%

Business Asset Disposal Relief (previously known as Entrepreneurs’ Relief)

• This is the relief that lets you sell your business and pay 10% CGT on up to £ 1 million of capital gains.
• The 10% rate increases to 14% from 6 April 2025 and to 18% from 6 April 2026

• HIGH INCOME CHILD BENEFIT CHARGE (“HICBC”)
  • It had already been announced that from 6 April 2024 the threshold for starting to repay your child benefit would be £60,000 with a taper up to £80,000 so with total income of £70,000 you would have to repay half of your child benefit back to HMRC.
  • HICBC will not now be based on household income as previously proposed
  • HICBC to be collected via an employee’s PAYE code from 2025

LANDLORDS

• STAMP DUTY LAND TAX
  • The 3% surcharge paid by most landlords has risen to 5%.
  • This applies to transactions with an effective date on or after 31 October 2024.
  •  Stamp duty thresholds to return to previous levels from 1st April 2025

• FURNISHED HOLIDAY LETTINGS
  • The special tax regime that provides lots of benefits to owners of furnished holiday lets will be abolished from 6th April 2025 (1st April for companies).

INHERITANCE TAX

Some sweeping changes to IHT including:

• Pension savings to be subject to inheritance tax from 6th April 2027.
• The freeze to the £325,000 nil rate band and £175,000 residence nil rate band has been extended by a further two years until 5th April 2030.
• 100% relief under business property relief and agricultural property relief will be limited to a combined cap of £1 million per person from 6th April 2026. The rate of relief will be 50% thereafter (producing an effective IHT rate of 20%). For example, a qualifying business valued at £2 million will result in IHT of £200,000.

EMPLOYERS

• EMPLOYERS NATIONAL INSURANCE

Employers NI will change as follows from 6th April 2025:

• The rate will increase from 13.8% to 15%
• The salary level where it kicks in will fall from £9,100 to £5,000 for 2025/26 to 2027/28
• The employment allowance will increase from £5,000 to £10,500
• The restriction preventing employers with an NI bill of more than £100,000 claiming the employment allowance will be abolished
• A sole director will continue to not be eligible for Employment Allowance.

• PAYROLLING BENEFITS IN KIND
  • Payrolling benefits in kind will be mandatory from April 2026.

• CARS AND VANS
  • The 100% first year allowance for new electric cars and charge points will be extended by one year until 5th April 2026. This generous tax relief allows businesses to claim the full cost of a new electric car as a tax deduction against their profits.However, the benefit in kind percentage (used to calculate the amount added to the taxable income of the employee or director in the case of companies) will gradually rise from 2% this year to 9% in 2029/30.Cars with emissions of 1 to 50g of CO2 per kilometre (typically hybrid vehicles), will rise to 18% in tax year 2028/2029 and 19% in tax year 2029/2030.
  • The Government has announced that it will NOT introduce legislation to maintain the tax treatment of double cab pick-ups as goods vehicles. From 6th April 2025 they will be treated as cars for capital allowance and benefit in kind purposes (1st April for companies).  There are transitional arrangements for cars purchased before April 2025.

• NATIONAL MINIMUM WAGE

Here are the minimum wage changes that were announced.  These will apply  from 5 April 2025.

	5 APRIL 2025	5 APRIL 2024
NATIONAL LIVING WAGE (21 AND OVER)	£12.21	£11.44
18 – 20 YEARS OLD	£10.00	£8.60
16-17 YEARS OLD	£7.55	£6.40
APPRENTICE RATE	£7.55	£6.40

CORPORATION TAX

• Corporation tax rates and thresholds will be fixed for the term of Parliament.

MAKING TAX DIGITAL (“MTD”) FOR THE SELF EMPLOYED AND LANDLORDS

There was confirmation of introduction of MTD from

• April 2026 if you have a turnover greater than £50,000
• April 2027 if you have a turnover greater than £30,000
• By the end of this Parliament if you have a turnover greater than £20,000
• Two key requirements are
  • Maintaining digital records (this can be using software or spreadsheets)
  • Submitting quarterly updates

HMRC

HMRC has received additional investment, with its budget for 2024/25 increasing from £4.7bn to £5.2bn, and its initial budget for 2025/26 set at £5.8bn. This increased budget will be allocated across compliance measures, improving HMRC customer services and modernising its systems.

WHAT DIDN’T CHANGE

As there was so much speculation about tax changes ahead of the Budget it’s important to point out what did not change:

• The freeze in income tax thresholds will not be extended beyond 5th April 2028. They will be increased with inflation in 2028/29
• No cuts to tax relief on pension contributions
• No cut in the £20,000 ISA allowance – it will remain unchanged until April 2030
• No employer’s national insurance on company pension contributions

If you have any questions on this article and how it affects you and your business, please get in touch.

JLA Accounting Limited takes every care in preparing material to ensure that the content is accurate and up to date. However, no responsibility for loss for anyone acting from or refraining from acting as a result of this information can be accepted by JLA Accounting Limited.