UNW’s summary of the key announcements from the Autumn Budget

Yesterday's Budget was historic for a number of reasons: the first by a woman Chancellor, the first of a completely new government after 14 years - and one of the highest tax-raising budgets on record (the biggest since Tory Chancellor Norman Lamont's in 1993). She emphasized the need to invest to drive growth and the need to restore public services and economic stability.

The Chancellor announced £40 billion in tax rises, with the largest part of this coming from increases in employers' National Insurance Contributions (NICs) from next April. Capital Gains Tax rates will also rise and SDLT on second homes and buy-to-let properties increases. There are also increases in Inheritance Tax - inherited pensions will fall within the net from April 2027 and reliefs are reduced on AIM shares and on the passing down of agricultural and business assets. The Chancellor also confirmed the introduction of VAT on private school fees and the abolishment of the tax regime for non-UK domiciled individuals. Fuel duty was, however, frozen again.

The extra taxes will be spent on filling the £22 billion 'black hole' bequeathed by the previous Government, plus more cash for the NHS and other public services, with a significant increase in public sector investment compared with inherited plans (under which it would have fallen). Although the Chancellor emphasized the need for growth, there was little to encourage private sector investment (although the Annual Investment Allowance and 'full expensing' are retained for capital allowances), nor much on the Green agenda.

As usual, as well as changes announced yesterday, our summary includes measures previously announced, but only coming into effect from April 2025 or later. These include:

Personal and Employment Taxes

• Income Tax - the rates of income tax remain unchanged at 20% (basic), 40% (higher) and 45% (additional rate); dividend rates are also unchanged
• Income Tax - the personal allowance and basic rate band for Income Tax remain frozen until 2027/28, but will then be uprated in line with inflation
• Non-UK domiciled individuals - old remittance basis of taxation based on domicile will be replaced with a new tax regime based on residence from 6 April 2025
• National Insurance Contributions - employer rate increases from 13.8% to 15% from 6 April 2025 and employer NIC threshold reduced from £9,100 to £5,000 a year from 6 April 2025 until 6 April 2028 (although the Employment Allowance will increase from £5,000 to £10,500)
• National Living Wage and National Minimum Wage increase from 1 April 2025
• Benefits - rates of tax for company cars increase from 6 April 2025 and double cab pick-up vehicles will be treated as cars for some tax purposes
• Reporting of benefits in kind - use of payroll software will become mandatory, in phases, from April 2026
• Employee Ownership Trusts and Employee Benefit Trusts - anti-avoidance reforms to their taxation from 30 October 2024

Business Tax

• Corporation Tax - no changes to rates or to capital allowances
• Furnished Holiday Lettings tax regime abolished from April 2025
• Changes to business rates
• Creative industries - changes to reliefs from 1 April 2025

Capital Taxes

• Capital Gains Tax - most rates increase, including for Business Asset Disposal Relief and Investors' Relief
• Capital Gains Tax annual exemption for 2025/26 remains as £3,000
• Inheritance Tax - the nil-rate band continue to be frozen, now until April 2030
• Unused pension funds and death benefits will become subject to inheritance tax from 6 April 2027
• Agricultural and Business Property Reliefs from Inheritance Tax - 100% relief will be capped at £1 million from 6 April 2026, with only 50% relief thereafter (relief on AIM shares also reduced to 50%)

Other measures

• Removal of VAT exemption for private school fees
• Stamp Duty Land Tax changes - additional rate for second homes or buy-to-let properties is increased from 3% to 5% for transactions from 31 October 2024
• Increase in the late payment interest rate charged by HMRC on unpaid tax liabilities

▶ Download our Autumn Budget Summary (PDF)

If you have any questions regarding the information covered in this summary, or would like advice on a particular area, please get in touch with either your usual contact or any of the UNW Tax partners. Contact details can be found on the final page of this summary PDF.