As the Labour government unveiled its first budget under Chancellor Rachel Reeves, the Autumn Budget 2024 introduces substantial shifts to support cost of living, encourage investments in businesses, and tackle structural economic issues. Here’s a quick look at what these changes mean for you and your business.
🔹 Corporate Tax Stability: The budget holds the Corporation Tax rate steady at 25% throughout this Parliament to provide continuity, with clear guidelines on capital allowances and permanent full expensing measures, which aim to bolster investment for SMEs and large firms alike. This means businesses can plan with greater tax certainty, benefitting growth and innovation.
🔹 Wage and Income Support: National Minimum Wage is set for an increase from April 2025, reaching £12.21 per hour for those aged 21 and over. Income tax and National Insurance thresholds will remain frozen until 2028, helping to ease the tax burden in the near term. There’s also targeted support for working carers and those receiving Universal Credit, enabling increased earning potential with reduced deductions.
🔹 Capital Gains and Inheritance Tax Adjustments: Entrepreneurs and investors will face a higher Capital Gains Tax rate for Business Asset Disposal Relief (BADR) and Investors’ Relief, gradually aligning these rates with the main CGT rate by 2026. Meanwhile, inheritance tax thresholds will be frozen, but new rules starting 2027 will bring unspent pension funds into inheritance tax calculations, marking a significant shift for wealth planning.
🔹 SMEs and High Street Relief: To foster high-street resilience, business rates relief is now permanent for small businesses in retail, hospitality, and leisure sectors in England. This long-term stability is supported by a cap on rateable value for businesses, as well as enhanced support for those with less than £500,000 rateable value.
This year’s budget reflects a balanced approach to fiscal management, seeking to aid households with cost of living, while promoting business investments and green initiatives. With these changes, Parker Russell is here to support you through the implications for your finances and growth plans.
