30/10/2024
Today is budget day and many people will be trying to work out how it impacts them. Please find below a breakdown of the key points:
Personal taxes
• Freeze on income tax and National Insurance thresholds to end in 2028
• Capital gains tax paid on profits from selling shares to increase from up to 20% to up to 24% - rates on additional property sales to stay same
• Freeze on inheritance tax thresholds extended beyond 2028 to 2030
• Pensions passed on will be subject to inheritance tax (IHT) from 2027
Business taxes
• Firms to pay National Insurance on workers’ earnings above £5,000 from April, down from £9,100 currently, with the rate increasing from 13.8% to 15%
• Employment allowance - which allows companies to reduce their NI liability - to increase from £5,000 to £10,500
• Tax paid by private equity managers on share of profits from successful deals to rise from up to 28% to up to 32% from April
• Main rate of corporation tax, paid by businesses on taxable profits over £250,000, to stay at 25% until next election
• Business rates relief will fall from the current 75% down to 45% for retail, leisure and hospitality businesses.
Transport, alcohol, to***co
• 5p cut to fuel duty on petrol and diesel, due to end in April 2025, kept for another year
• Air Passenger Duty on flights by private jet to go up by 50%
• Tax on to***co to increase by 2% above inflation, and 10% above inflation for hand-rolling to***co
• Tax on non-draught alcoholic drinks to increase by the higher RPI measure of inflation, but tax on draught drinks cut by 1.7%
Wages, benefits and pensions
• Legal minimum wage for over-21s to rise from £11.44 to £12.21 per hour from April
• Rate for 18 to 20-year-olds to go up from £8.60 to £10, as part of a long-term plan to move towards a "single adult rate"
• Eligibility widened for the allowance paid to full-time carers, by increasing the maximum earnings threshold from £151 to £195 a week
UK debt, inflation and economic growth
• Office for Budget Responsibility predicts the UK economy will grow by 1.1% this year, 2% next year, and 1.8% in 2026
• Inflation predicted to average 2.5% this year, 2.6% next year, before falling to 2.3% in 2026