The Autumn Budget 2024, was delivered by Chancellor Rachel Reeves' this afternoon and introduces significant changes to the UK tax system - some impacting immediately and others from April 2025.
Main points:
- No increases in working people's (employed/self employed) income tax.
- No rises in 'employee' National Insurance.
- No increases in VAT.
- Fuel duty frozen for another year and 5p planned rise shelved.
- Personal tax threshold freeze will be over and back to inflation linked rises from 2028.
Businesses/Investors planning their taxes should:
- Employer NIC planning with the new rates.
- Capital gains tax timing decisions.
- Property purchase timing around stamp duty changes.
- Business investment planning under the new allowances.
- Inheritance tax and estate planning review.
Let's breaks down the key tax changes and what they mean.
Income Tax and Personal Allowances
You can calculate your 2025-26 income tax in our updated tax calculator!.
The new Labour government has confirmed that basic, higher, and additional rates of income tax will remain unchanged, but from April 2028, personal tax thresholds will be uprated with inflation - finally putting an end to the fiscal drag of inflation putting extra tax revenue in the Taxman's pocket.
National Insurance Contributions (NICs)
You can calculate Employers' NICs for 2025-26 using our Employers' National Insurance Calculator.
Significant changes to National Insurance include:
- Employer NICs rate increasing from 13.8% to 15% from April 2025.
- Secondary threshold (employer NICs) reducing to £5,000 per year.
- Employment Allowance increasing from £5,000 to £10,500.
- Employment Allowance removal threshold of £100,000 is removed from April 2025.
No changes for employees or the self employed were tabled - even though there was much speculation.
Capital Gains Tax Changes
Big changes to CGT are now reflected in our Capital Gains Tax Calculator. (if you are disposing of non-residential assets on or after 30/10/2024, you will need to categorise them as 'residential assets' for tax to be calculated at the new higher rate).
For non-residential gains, the lower rate is increasing from 10% to 18% and the higher rate rising from 20% to 24%. This is applicable for disposals made on or after October 30th 2024. Residential gains are the remaining the same as now, so both types are now taxed the same.
Stamp Duty Land Tax Updates
In another blow to property investors, and you can check the effect in our Stamp Duty Calculator, here are the key changes to property taxation:
- A higher surcharge rate for additional dwellings - the surcharge is increasing from 3% to 5%.
- Standard residential purchase rates remaining unchanged until March 2025, but then stamp duty goes from 4 bands to 5 bands.
- First-time buyer relief continuing with current thresholds, but new changes coming into effect from March 31, 2025 will reduce the zero band to £300k from £425k - also reducing the max price to get the discount to £500,000.
Inheritance Tax Reform
The nil-rate bands to stay frozen until April 2030.