The Chancellor, Rachel Reeves, delivered her Budget this afternoon, promising to fix the foundations and deliver change by investing in the country to produce a growing economy that puts more money in people’s pockets.
The Budget raises taxes by £40bn, and the tax changes include:
Personal tax
- Non-UK domicile regime
- Confirmation that this will be abolished from April 2025
- Confirmation that the Government intends to “close the loopholes” in the previous Government’s plans – no further details provided in the Budget speech.
- Extend temporary repatriation relief to three years
- Capital Gains Tax (CGT)
- Increase lower rate from 10% to 18% from today
- Increase upper rate from 20% to 24% from today
- Lifetime limit for BADR remaining at £1m
- Business Asset Disposal Relief (BADR) rate of 10% remains for now, then 14% from April 2025 and 18% from April 2026
- Carried interest rate will be 32% from April 2025
- Income tax
- Allowances and thresholds will increase by inflation from 2028
Employment tax
- Employer’s NIC changes
- Increase from 13.8% to 15.0% from April 2025
- Reduce secondary threshold from £9,100 to £5,000
- Employment allowance increasing from £5,000 to £10,500
Inheritance tax (IHT)
- Nil Rate Band of £325,000 frozen until 2030
- From April 2027 inherited pensions will be subject to IHT
- Agricultural Property Relief and Business Property Relief will be reformed from April 2026 – up to a combined £1m of assets will attract 100% relief, but for assets over £1m only 50% relief
- 50% IHT relief for shares listed on AIM and similar markets
Property taxes
- Intend to introduce lower rate for retail, hospitality and leisure properties from 2026/27
- Business rates for retail, hospitality and leisure properties will benefit from 40% relief in 2025/26 – up to a maximum discount of £110,000 per business
- Stamp Duty Land Tax higher rate for additional dwellings to rise by 2%, from 3% to 5%, from tomorrow
VAT
- Confirmation that VAT will apply to private school fees from January 2025
Other
- Investment will be made in technology and extra HMRC staff to reduce tax gap
- Interest rates on unpaid tax will be increased
- Fuel duty to remain frozen next year including 5p cut
- Introduction of a flat rate duty on vaping liquid
- Alcohol duty on draught drinks will be cut by 1.7%
- Air passenger duty increasing by 50% on private jets
Further details to follow in our full summary, available on 31 October 2024.
Please contact Mark Baycroft, Partner with any queries.
