Blog Post
Autumn Budget 2024: What you need to know
October 31, 2024
Autumn Budget 2024: What you need to know
OnTheGo Accountants are here to break down the key points from Chancellor Rachel Reeves' Budget announcement that may impact you as a business owner in the UK.
Higher Wages and Employer Costs:
- National Living Wage Increase: Get ready for higher wage bills. The minimum wage for over-21s will rise to £12.21 from April 2025, with similar increases for younger workers. The government also hinted at a single adult rate in the future.
- Apprenticeship Wage Increase: Apprentice wages will also see a boost to £7.55 per hour.
- Employer National Insurance Hike: This is a big one. Employers' National Insurance contributions are jumping from 13.8% to 15% starting April 2025. Additionally, the threshold at which businesses start paying National Insurance on employee earnings drops from £9,100 to £5,000. However, there is some relief for smaller businesses with an increase in the employment allowance from £5,000 to £10,500.
Tax Changes:
- Capital Gains Tax Uplift: Capital gains tax is increasing immediately, with the lower rate rising to 18% and the higher rate to 24%. Selling a second property? The Capital Gains Tax rate remains at 18% and 24%.
- Inheritance Tax Freeze Extended: The freeze on inheritance tax thresholds will continue for another two years, meaning you can inherit up to £325,000 tax-free (with some exceptions).
- Business Asset Disposal Relief Changes: Business Asset Disposal Relief remains at 10% for the rest of the year, but will increase to 14% in 2025/26 and 18% in 2026/27 onwards.
- Non-Dom Tax Regime Abolished: This is a significant change. The non-domicile tax regime is being scrapped from April 2025. A new residence-based system will be introduced for temporary residents.
- Stamp Duty on Second Homes: Expect to pay more for that second property. The stamp duty rate on second homes is rising, buyers will now pay 5% on top of the standard SDLT rates.
- VAT on Private Schools: Private school fees will be subject to VAT starting in January 2025. Additionally, private schools will lose their business rates relief from April 2025.
Other:
- Electric Vehicle Incentives Remain: The government is maintaining existing incentives for electric company cars until 2028, while also increasing the tax differential between electric and other vehicles.
- State Pension Increase: Good news for pensioners! The state pension will rise by 4.1% in 2025/26, thanks to the government's commitment to the triple lock.
This budget represents a significant shift in tax policy and spending. OnTheGo Accountants are here to help you navigate these changes and ensure you are compliant with the new regulations. Stay tuned to our social media for further analysis and don't hesitate to reach out if you have any questions.
In the realm of employee share schemes, understanding the tax implications is crucial for both employers and employees. One significant aspect to consider is the Section 431 election, a provision under the UK's Income Tax (Earnings and Pensions) Act 2003. This election plays a pivotal role in determining how employment-related securities, particularly restricted shares, are taxed.
In today's rapidly evolving business environment, intangible assets have become central to a company's value and growth potential. Traditional accounting standards, however, have struggled to keep pace with the diverse and complex nature of these assets. Recognising this gap, the International Accounting Standards Board (IASB) and the UK Endorsement Board (UKEB) are embarking on a comprehensive review of IAS 38: Intangible Assets, a standard that has remained largely unchanged for over 26 years.
The UK government has been generous in supporting research and development (R&D) through tax relief schemes. However, with increased scrutiny from HMRC, many businesses are seeing their claims rejected, even after initial approval.
