Chancellor Rachel Reeves announced her highly-anticipated Autumn Budget on 30 October, raising taxes by £40bn.
The Office for Budget Responsibility projected that inflation based on consumer price index would average 2.5% in 2024, ticking up to 2.6% in 2025.
Here are 10 key takeaways from the 2024 Autumn Budget:
Capital Gains Tax Rise
The lower rate of capital gains tax will rise from 10% to 18% while higher rate increases from 20% to 24%. Reeves said this will still be the lowest rate in a European G7 country. In addition, carried interest will be increased to 31%. Capital gains tax on residential properties will remain at 18% and 24%.
Debt policy restructure
Debt policy will change to being measured by public sector net financial liabilities as a percent of GDP, freeing up near £50bn for investment projects. Before the change, public investment rates were project to drop to 1.7% of the GDP in five years.
Income tax threshold to rise
The income tax threshold will start to rise again in 2028, a policy put in place by the Conservative government in 2022. The freeze meant that many were subject to higher tax rates as salaries increases with inflation, while the threshold did not increase with inflation.
Employer’s National Insurance rises
Employer’s national insurance tax was raised to 15%, a 1.2% increase creating £25bn in tax revenue. The earnings threshold where companies begin to pay was also lowered from £9,100 to £5,000. While Labour pledged not to increase taxes on the working public, some argue that the increase on employers will have this indirect effect.
Inheritance Tax continues freeze
Inheritance tax will continue its freeze until 2030, with the first £325,000 of any estate tax free, and the first £500,000 for an estate with a residence passed to a direct descendent.
Minimum wage increases
The national minimum wage was increased by 6.7% to £12.21 an hour for those over 21, with those 18-20 experiencing a 16.3% raise to £10.
Non-Dom abolished
Domicile status will be removed from the tax system next year, as Reeves called the policy “an outdated concept”.
AIM met with 20% inheritance tax
Stocks listed on the Alternative Investment Market (AIM) will have a 20% inheritance tax, but will maintain its 50% relief for shares which some expected to be eliminated in the Budget.
Modern industrial strategy updates
Reeves laid out details of the National Wealth Fund, focusing on sectors with the “biggest growth potential” including £1bn for the aerospace sector and £2bn for the automotive sector.
Pension tax-free lump sums unchanged
The £268,275 tax-free lump sum withdrawal from pension pots was left unchanged during the Budget, despite speculation that it could be reduced to £100,000 to create additional tax revenue.
