The highly anticipated 2024 Autumn Budget
Key announcements from the UK's 2024 Autumn Budget reveal substantial economic and fiscal changes, with notable implications for businesses, workers, and families.
Tax Reforms: New tax hikes are expected to raise an additional £40 billion, impacting wealthier individuals and businesses. Capital Gains Tax will increase to 18% for lower-rate and 24% for higher-rate taxpayers by April 2025. Additionally, inheritance tax reliefs will be reduced, capping agricultural and business property relief on assets over £1 million at 50%, which could challenge family-owned agricultural enterprises.
National Insurance and Wages: Employer National Insurance Contributions will rise by 1.2 percentage points to 15% starting in April 2025. The National Living Wage will also see a substantial increase to £12.21 per hour, alongside increases in the minimum wage, impacting hiring costs for small to medium enterprises (SMEs).
Corporate Tax Roadmap: Stability in corporate tax was a focal point, with the main corporation tax rate maintained at 25% and full capital allowances, including a £1 million Annual Investment Allowance, secured for eligible companies. This aims to support businesses in long-term planning and capital investment.
Retail and Hospitality Relief: A temporary 40% reduction in business rates for retail, hospitality, and leisure businesses will be provided, with a cap of £110,000 per business for 2025-26. This is meant to support these sectors, which are still recovering from economic strains post-pandemic.
New Vaping Tax and Tobacco Duties: To address public health and revenue needs, a tax on e-cigarettes was introduced, with tobacco and alcohol duties also increased. The new vaping tax will take effect in 2026, aligning with the government’s anti-smoking goals.
Infrastructure and Digitalisation: The government reaffirmed its commitment to HS2, specifically focusing on the Euston to Manchester leg, and announced plans to enhance digital reporting standards for crypto assets from 2026, part of a broader effort to close tax loopholes and enhance fiscal transparency.
These measures mark a shift towards balancing public finance with growth objectives while introducing reliefs and rate freezes intended to buffer small businesses from the immediate impact of wage and tax increases.
What could the announcement mean for businesses?
The UK Autumn Budget 2024 introduces mixed impacts for businesses. Increased National Insurance contributions and wage rises will raise operating costs, particularly challenging small businesses.
For larger enterprises, stability is signalled through a steady corporation tax rate and full capital allowances, supporting long-term planning and investment. Tax changes, including higher Capital Gains Tax and limited inheritance relief, may influence business owners’ asset strategies. Additionally, retail and hospitality sectors receive temporary relief through reduced business rates, offering some economic relief.
You can learn more about the full impact of the budget in the summary from James Manning, MHR's legislation expert.
