Chancellor Rachel Reeves’ Autumn Budget 2024 addresses key economic concerns, aiming to stabilize public finances while offering relief to working individuals and small businesses. Here’s a closer look at the major points affecting entrepreneurs, companies, and employees.
1. Boost for Working Individuals
The budget includes positive news for workers, particularly those on minimum wage. From April 2025, the National Living Wage will increase to £12.21 per hour, a step toward a “genuine living wage.” This adjustment will positively impact millions, especially in lower-income roles. Additionally, fuel duty remains frozen, which helps curb commuting costs, and National Insurance thresholds will be adjusted in 2028 to avoid pulling more workers into higher tax brackets.
2. Key Adjustments for Employers and Small Businesses
For business owners, there are some changes in employer contributions and allowances. Employer National Insurance rates will increase in 2025, but with an offset for small businesses through an increased Employment Allowance. This will allow smaller firms to employ up to four full-time workers without paying National Insurance on their wages. Furthermore, the budget solidifies the Corporate Tax rate at a capped 25% and preserves attractive capital allowances, encouraging businesses to plan for stable growth.
3. Tax Adjustments on High-Value Assets
Businesses and high-earning individuals will see changes in Capital Gains Tax (CGT), which is set to rise to align more closely with property rates. Additionally, from 2027, inherited pension pots will be subject to inheritance tax, a shift aimed at preserving pensions primarily for retirement rather than wealth transfer.
4. Sustainability and Long-term Planning
Zero-emission vehicles will enjoy lower tax rates, encouraging businesses and individuals to adopt greener options. The budget also introduces a Corporate Tax Roadmap designed to provide clarity on corporate taxation, supporting sustainable business growth and investment in the UK.
As always, navigating these changes effectively is essential. Our team at Lucas Prestige Accountants is here to provide clarity and support, ensuring that businesses and individuals understand the full implications of these updates on their finances.
