Autumn Budget 2024: What the Changes Mean for You, Your Business, and Your Future

Key Changes Impacting Individuals, Businesses, and Investors

On 30 October, the Chancellor revealed the Autumn Budget for 2024, introducing some sweeping changes across personal and business taxes. From personal income adjustments to new rules for foreign-domiciled individuals, these changes impact everything from your income and investments to business expenses and property. Let’s break down the most significant updates and how they might affect you.


1. Personal Income Tax: A Freeze on Allowances

  • Frozen Allowances and Thresholds: The personal allowance and 40% tax threshold will stay at their current levels until 2027/28. With inflation and wage growth, this “fiscal drag” will likely push more earners into higher tax bands, meaning many people will pay more tax without any changes to their income.
  • High Income Child Benefit Charge (HICBC): The HICBC is still based on the income of the highest earner in a household, starting at £50,000, with no changes to the threshold. This continues to affect families where one parent earns above this level, clawing back benefits.

2. Foreign-Domiciled Individuals: Major Changes to Remittance Basis

  • From April 2025, foreign-domiciled individuals in the UK will no longer benefit from the remittance basis. In short, all their income worldwide will be taxed in the UK, whether or not they bring it into the country.
  • Transitional Reliefs: New residents (those who haven’t lived in the UK for the past 10 years) get a four-year exemption on foreign income and gains. And for those who used the remittance basis before, there are rules to soften the transition.

3. Employees: Wages Going Up, and Company Car Taxes Changing

  • National Living Wage Increase: From April 2025, workers aged 21+ will see a rise in the National Living Wage.
  • Company Car Tax: If you drive a company car, your tax rates will increase each year, especially for hybrid vehicles. Fully electric cars, however, continue to benefit from lower rates.

4. National Insurance Contributions (NICs): Changes for Both Employers and Employees

  • Employee NIC Reduction: Good news for employees – the main NIC rate is decreasing from 12% to 8% by April 2024.
  • Employer NIC Increase: However, employers will see their NIC rate rise to 15% from April 2025, alongside a lower Secondary Threshold. This could influence some employers to favour contractor arrangements over hiring directly, particularly for highly paid roles.

5. Savings and Pensions: A Focus on Stability, but with an IHT Twist

  • ISA and Pension Limits: No changes here – ISAs stay capped at £20,000 a year, and Junior ISAs at £9,000, providing stability for savers and investors.
  • Inheritance Tax (IHT) on Pensions: Starting April 2027, unused pension funds will be considered part of your estate for IHT. This is a shift from current rules, so if you have substantial pension savings, new estate planning may be in order to avoid unexpected tax hits.

6. Capital Gains Tax (CGT): A Flat Rate for Most

  • New Flat CGT Rate: CGT is now 24% for most assets, except gains within the basic rate band, which are taxed at 18%.
  • Carried Interest Adjustments: For those affected by carried interest, the rate will be 32% from 2025/26 and eventually treated as income tax. These changes push CGT closer to income tax rates, especially on high-value gains.

7. Inheritance Tax (IHT): Frozen Allowances and Reduced Reliefs

  • Nil Rate Band Freeze: The £325,000 nil rate band for IHT remains frozen until 2030, meaning as asset values increase, more estates will be subject to IHT.
  • Agricultural and Business Reliefs: From 2026, only the first £1 million in agricultural or business property will receive 100% relief; any value above this receives 50%. This will affect family businesses and estates that rely on these properties for tax relief.

8. Business Tax: Reduced Reliefs for Holiday Lettings

  • Furnished Holiday Lettings (FHLs): The tax perks for FHLs will end in April 2025, so property owners may need to re-evaluate the advantages of holding such properties.
  • Business Rates Relief: Retail, hospitality, and leisure businesses will see reduced relief from April 2025, dropping from 75% to 40%.

9. Corporation Tax: Encouraging Green Investment

  • Corporation Tax Rates: The main rate remains at 25% for profits above £250,000, with small profits up to £50,000 keeping a 19% rate.
  • Full Expensing for Green Assets: Full expensing for plant and machinery investments continues, encouraging businesses to invest in sustainable assets. Zero-emission cars and charging points retain 100% first-year allowances until 2026.

10. VAT Changes: Registration Threshold and Private Schools

  • VAT Threshold Increase: As of April 2024, the VAT registration threshold is now £90,000, giving small businesses some breathing room before they need to register.
  • Private School Fees: Labour’s push to apply VAT to private school fees will take effect from January 2025, so schools will need to register and comply with VAT rules quickly.

11. Property Taxation: Higher Rates for Second Homes and Adjustments for First-Time Buyers

  • HRAD Increase on Additional Properties: The SDLT surcharge for additional homes is now 5%, increasing acquisition costs for buy-to-let investors and second homeowners.
  • First-Time Buyer Relief: From April 2026, the SDLT nil rate for first-time buyers reduces to £300,000, affecting the tax-free allowance they receive.

12. Other Measures: Digital Tax and HMRC Compliance

  • Making Tax Digital: From 2026, sole traders and landlords earning above £50,000 will need to file digital tax returns. By 2027, this will apply to those earning over £30,000, so digital record-keeping will become essential.
  • Fuel Duty Cut Extension: The 5p cut to fuel duty will continue until March 2026, providing relief for road-based businesses.
  • HMRC Compliance Boost: An additional £1.662 billion investment in HMRC is expected to enhance compliance, potentially recovering an extra £4.7 billion annually by 2029.

What This Means for You

The Autumn Budget 2024 introduces substantial changes that may affect your income, investments, and business strategies. High-income earners will need to keep a close eye on their tax exposure as rates hold steady but thresholds freeze. Foreign-domiciled residents face a significant shift in how their global income is taxed, and businesses may need to adjust strategies around company cars, NICs, and new expensing rules.

For advice on optimising your tax position under these new rules, speak to us at ISA Consortium. As qualified accountants and tax advisors, we can help you explore planning opportunities tailored to your goals. Whether it’s personal income tax planning, inheritance strategies, or corporate tax advice, our team is here to support you through these updates, helping you secure a tax-efficient future.

Book your free appointment with ISA Consortium

For more information and professional advice, please get in touch for a free appointment. We will discuss all the needs of you and your business, and head you in the right direction for future business .

All this and more

We offer all the above as part of our full Tax Services and Accounting and can also help you with Capital Gains Tax, Inheritance Tax, Retirement Planning, even filling out your Self-Assessment Tax Returns for you.

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