Overview of Autumn Budget by Michael Morrissey

UK Autumn Budget 2024: Key Highlights for Businesses and Individuals

On 30 October 2024, Chancellor Rachel Reeves presented the Autumn Budget, emphasising economic growth and stability with a focus on investments. Morrissey Chartered Accountants  outline the significant measures that may impact individuals and businesses alike.

Personal Tax

 

Income tax bands remain largely unchanged, with the basic rate set at 20% on income up to £37,700. Higher rate taxpayers start at £50,270, while the additional 45% rate applies from £125,140. The personal allowance remains frozen at £12,570 until 2028, and high earners will still see a taper from £100,000 upwards. Savings tax reliefs are steady, with a savings allowance of £1,000 for basic rate taxpayers, reduced to £500 for higher-rate taxpayers, and a dividend allowance of £500.

Pensions and ISAs

Annual pension contributions are capped at £60,000, with a taper applied for those earning above £260,000. Individual Savings Account (ISA) limits remain at £20,000 for adults and £9,000 for Junior ISAs, supporting tax-free growth for long-term savers.

Business Taxation

Corporation tax rates remain steady at 25% for profits over £250,000, with small profit companies paying 19%. Businesses can still benefit from the £1 million Annual Investment Allowance, and full expensing is available on qualifying new plant and machinery. For those investing in zero-emission cars or electric vehicle charge points, the government has extended the 100% First-Year Allowances until 2026.

Employment Taxes

Employer NICs will rise from 13.8% to 15% starting in April 2025. The threshold for paying NICs is lowered to £5,000, which will stay in effect until 2028. Additionally, the Employment Allowance has been raised to £10,500, expanding eligibility to more businesses, regardless of their employer NIC bill.

Capital Gains and Inheritance Tax

Capital Gains Tax rates for non-residential property disposals increase from 10% to 18% at the basic rate and 20% to 24% at the higher rate, with exemptions for residential property. For individuals, trustees, and personal representatives, a 24% rate now applies. Inheritance Tax bands remain frozen, with the nil-rate band fixed at £325,000 and the residence nil-rate band at £175,000 until 2030.

Stamp Duty and VAT

For individuals purchasing additional residential properties, Stamp Duty Land Tax (SDLT) has risen to 5% over standard rates. The VAT registration threshold is unchanged at £90,000, continuing to support smaller businesses in maintaining VAT compliance.

 

Additional Changes

The government remains committed to the rollout of Making Tax Digital by 2026, targeting businesses and individuals with income over £20,000. HMRC also plans to enhance its compliance efforts, with increased staffing and system upgrades to improve tax management and debt collection.

 

If you need assistance with accountancy, tax compliance, or business advisory, please feel free to contact Morrissey Chartered Accountants. You can also sign up for our newsletter to receive the latest updates on topical issues. https://www.morrisseyca.co.uk/registration/