Summary of Changes Announced in The Autumn Budget 2024

In the Autumn Budget of 2024, Chancellor Rachel Reeves introduced several significant measures aimed at addressing fiscal challenges and supporting public services. Key changes include:

Taxation Adjustments

- Employer National Insurance Contributions (NICs): From April 2025, the rate for employer NICs will increase by 1.2 percentage points to 15%. Additionally, the earnings threshold at which employers start paying NICs will be reduced from £9,100 to £5,000 per year. To support small businesses, the Employment Allowance will rise from £5,000 to £10,500, allowing eligible employers to offset their NICs liability.

- Capital Gains Tax (CGT): The lower rate of CGT will increase from 10% to 18%, and the higher rate from 20% to 24%, effective for disposals made on or after 30 October 2024. This change affects investors and business owners disposing of assets.

- Inheritance Tax (IHT): Starting April 2026, the existing 100% relief for agricultural and business property will apply only to the first £1 million of combined property value. Any value above this threshold will receive a 50% relief, potentially impacting family-owned businesses and farms.

Income Tax and National Insurance Thresholds

- The thresholds for Income Tax and National Insurance will remain frozen until 2028. While tax rates are unchanged, this freeze may lead to higher tax liabilities over time due to wage inflation, a phenomenon known as "fiscal drag."

National Minimum Wage Increase

- Effective April 2025, the National Minimum Wage will rise:
- For individuals aged 21 and over, from £11.44 to £12.21 per hour.
- For those aged 18 to 20, from £8.60 to £10 per hour.
- For apprentices and individuals aged 16 to 17, from £6.40 to £7.55 per hour.

Public Service Funding

- National Health Service (NHS): An additional £22.6 billion will be allocated over the next two years, marking the largest increase in NHS spending since 2010 (excluding COVID-19 years). This funding aims to facilitate 40,000 more elective appointments each week and includes upgrades for GP facilities, new surgical hubs, and more diagnostic scans.

- Education and Infrastructure: The budget outlines significant investments in education, transportation, and housing, with over £100 billion allocated for infrastructure projects to rebuild schools, hospitals, and improve roads, including the repair of over one million potholes.

Fuel Duty

- The existing fuel duty freeze will continue, maintaining the current rates and providing relief to motorists amid ongoing cost-of-living challenges.

These measures reflect the government's strategy to balance fiscal responsibility with investments in public services and support for working individuals. While tax increases are implemented to address budgetary pressures, efforts are made to mitigate impacts on small businesses and low-income earners.