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Autumn 2024 Budget Summary

Wayne Glenton

30 Oct 2024

A summary of the key elements of the 2024 Autumn Budget

The Autumn Budget 2024 brings a blend of cautious stability and targeted adjustments across inheritance and capital taxes, business contributions, and support for lower-income households. It focuses on fiscal responsibility and investment in public services while avoiding sweeping changes in areas such as Income Tax, VAT, and Corporation Tax. Here’s a closer look at the key elements and how they may be received:


  1. Inheritance Tax (IHT) Reform: The most significant change in the IHT landscape is the cap on Agricultural and Business Property Reliefs (APR and BPR) at £1 million for full relief, with assets over this threshold qualifying for 50% relief. While intended to ensure wealthier estates contribute more, this could prompt families to revisit succession plans, particularly for multi-generational farms and family businesses.


  2. National Insurance Contributions (NICs): The increase in employer NICs by 1.2% from April 2025, alongside the reduction in the threshold to £5,000, is partially offset by the expansion of the Employment Allowance to £10,500. For larger businesses, this NIC rise may be felt, potentially affecting wage and hiring budgets. Smaller businesses, however, may find some relief in the higher Employment Allowance.


  3. Capital Gains Tax (CGT): Changes to CGT are substantial, with the lower rate rising from 10% to 18% and the higher rate from 20% to 24%. Business Asset Disposal Relief (BADR) will also gradually increase to 14% by April 2025, then align with the main lower rate of 18% from April 2026. The phased approach may ease the impact, although it signals a shift towards higher tax on gains, which could influence decisions on asset sales and reinvestment.


  4. Income Tax, VAT, and Corporation Tax: Notably, the government has opted not to increase Income Tax, VAT, or Corporation Tax rates. This may reassure many businesses and workers, particularly after recent years of fiscal changes and rising costs. Keeping Corporation Tax capped at 25% provides stability, potentially bolstering confidence in business investment despite other tax rises.


  5. Stamp Duty Land Tax (SDLT): The Higher Rates for Additional Dwellings (HRAD) have been raised from 3% to 5% for second homes, buy-to-let properties, and company-owned residential purchases. This change aims to support first-time and primary residence buyers, with a view to gradually easing housing affordability challenges by dampening demand from speculative buyers.


  6. Cost-of-Living Support: The extension of the Household Support Fund and an increase in the National Living Wage provide much-needed relief for low-income households, demonstrating the government’s commitment to protecting the most vulnerable from inflation and economic pressures. These initiatives may be welcomed by both beneficiaries and advocates for economic equality.


  7. Investment in Public Services: Increased investment in the NHS, infrastructure, and education underlines the government’s commitment to long-term growth. By prioritising the public sector and aiming to raise productivity, the government seeks to address issues such as NHS waiting times, school funding, and transport upgrades. Effective implementation could strengthen public perception of these investments.


Reception and Implications


This budget may be received with mixed reactions. Business owners, particularly those impacted by changes to CGT and NICs, may express concerns over the cumulative effect of higher costs. However, for individual taxpayers, the stability in Income Tax and VAT rates offers predictability after a period of economic uncertainty. Meanwhile, homeowners and lower-income households may welcome the targeted support measures, which reflect the government’s intention to manage inflation’s impact on essential living costs.


Politically, the balance between investment in public services and selective tax increases reflects a focus on fiscal responsibility without endangering economic growth. Some might argue the reforms are modest in scope, particularly around IHT, yet the budget prioritises gradual, predictable change over sweeping adjustments.

This approach seeks to strike a middle ground, focusing on sustainable investment in core services, moderate tax reform, and targeted cost-of-living support. Whether the budget stimulates the economy as intended remains to be seen, but it lays a foundation for longer-term stability and growth with minimal shocks, which could prove prudent amid ongoing global economic uncertainties.

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