Rachel Reeves, the new Chancellor of the Exchequer, has presented the Labour Government’s first Budget in over a decade. The 2024 Autumn Budget is framed around the themes of “fixing the foundations and delivering change,” the Budget aims to invest in Britain’s future through substantial funding in various sectors. However, with ambitious goals come some necessary increases in taxation—an additional £40 billion in tax revenue is expected to fund these new initiatives. Here’s a breakdown of what’s changing and what it means for individuals, businesses, and families.
For Individuals: Changes to Taxes on Assets and Inheritance
1. Capital Gains Tax Increase on Asset Sales (excluding Residential Property)
2. Inheritance Tax Relief Restrictions (Starting April 2026)
3. Inclusion of Pension Values in Inheritance Tax Calculations (From April 2027):
Pension values will now be considered part of a deceased’s estate for inheritance tax purposes, potentially increasing the tax burden on beneficiaries.
For Businesses: Adjustments in National Insurance, VAT, and Minimum Wage
1. Employer’s National Insurance Increase and Lower Threshold:
The employer’s National Insurance rate will increase from 13.8% to 15%, and the threshold at which this tax applies will drop from £9,100 to £5,000.
2. VAT on Private School Fees:
In a notable change, private school fees will now be subject to VAT, which could increase tuition costs for many families.
3. Increase in the National Minimum Wage:
The National Minimum Wage will rise, positively impacting lower-income employees while likely increasing payroll costs for employers.
What’s Next: Opportunities and Considerations
This Budget introduces several significant shifts for both individuals and businesses. For individuals, planning around capital gains and inheritance taxes has become more complex, and changes may necessitate revisiting long-term strategies. Businesses, especially those in labour-intensive sectors or with private education ties, should prepare for increased payroll and tax costs and consider how these will impact pricing, hiring, and overall financial planning.
Our team is here to guide you through the The 2024 Autumn Budget’s impact on your personal or business finances. Download our attached guide, “Your Guide to the Autumn Budget,” for a more detailed look at these changes.
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