Autumn Statement 2024 - updated

The Autumn Statement 2024 saw the Labour Government standby its promise not to increase VAT, income tax or NIC for individuals, but significant changes were still made. Here we have summarised them:

For individuals, key changes included:

• Capital gains tax rates increase from 10% to 18% (basic rate) and 20% to 24% from 30 October 2024.
• Residential property continues to be taxed at the higher 18% and 24% rates as previously.
• The Investors' Relief lifetime limit of £10 million of gains is reduced to £1 million, effective 30 October 2024.
• Tax payable on qualifying Investors' Relief and Business Asset Disposal Relief gains (previously Entrepreneurs' Relief) will be gradually increased from 10% to 14% on 6 April 2025, then to 18% on 6 April 2026.
• From 6 April 2025, carried interest will be taxed at an 'interim' CGT rate of 32%, before reforms are made to bring all carry into the income tax regime from 6 April 2026.
• Unused pensions and death benefits will be included in the deceased's taxable estate from 6 April 2027.
• From 6 April 2026, Agricultural and Business Property Reliefs at 100% will be limited to a combined total of £1m, with relief provided at 50% thereafter.
• AIM shares, and other quoted but not listed holdings, will receive Business Property Relief at 50% only (reduced from 100%).
• The higher rate of Stamp Duty Land Tax for the purchase of second properties is increased from 3% to 5% from 31 October 2024.
• The non-domicile regime will be abolished from 6 April 2025 and replaced with a new residence-based regime.
• For income and capital gains tax, foreign income and gains are not taxable in the first four-years of UK tax residence if preceded by a period of ten-years consecutive non-UK tax residence.
• There will be a Temporary Repatriation Facility of three-years for current and past remittance basis users.
• For inheritance tax, non-UK assets will come into the scope of UK IHT if considered a 'long-term resident', i.e. if you have been UK tax resident in at least 10 of the last 20 years. You will remain in scope for between three and ten years after leaving the UK and this will also capture assets put into Trust.

For employers, key changes include:

• Secondary Class 1 NICs (Employer NICs) to increase from 13.8% to 15% from 6 April 2025.
• Secondary Threshold, the point at which employers become liable to pay NICs on employees' earnings, will decrease from £9,100 to £5,000 a year from 6 April 2025.
• The Employment Allowance will increase from £5,000 to £10,500, with the removal of the threshold of employer NICs bills of £100,000 or less removed, from 6 April 2025.
• The Lower Earnings Limit (LEL) will be increased by 1.7% from 2025-26 to £6,500 per annum.
• National Living Wage increases from April 2025 to £12.21 per hour for all eligible employees, and the National Minimum Wage for 18–20-year-olds will increase to £10.00 per hour for all eligible workers. In addition, the minimum wages for Under 18s and Apprentices is increasing to £7.55 per hour.
• Recruitment agencies will be responsible for accounting for PAYE on payments made to workers that are supplied via umbrella companies, taking effect from April 2026. Where there is no agency, this responsibility will fall to the end client business. This will take effect from April 2026.
• A number of changes to Benefits in Kind are also coming into effect:
  • Payrolling of Benefits will be compulsory from April 2026, with the exclusion of loans and accommodation.
  • Company Car Tax rates confirmed for 2028-29 and 2029-30, incentivising the take up of electric vehicles.
  • Double cab pick up vehicles will to be treated as cars from 1 April 2025 for Corporation Tax, and 6 April 2025 for income tax, with transitional rules applying.

For corporation tax, there was little by way of change. The key points to be aware of include:

• The release of the Corporate Tax Roadmap, which included the following headlines:
  • The corporation tax rate will be capped at a maximum of 25% to the end of this parliament.
  • The small profits rate and marginal relief will be maintained at their current rates and thresholds.
  • The current capital expenditure reliefs, including full expensing, the £1m annual investment allowance (AIA), writing down allowances and structures and building allowances would remain unchanged. With full expensing being explored for assets bought for leasing or hiring.
  • No further changes to the rates of the research and development (R&D) merged scheme and patent box schemes.
  • Continue its commitment to pillar one and pillar two rules for the largest businesses (worldwide turnover over €750m).
• There is an extension to the Green First Year Allowances for a further year, enabling 100% First Year Allowances (FYA) for qualifying expenditure on zero-emission cars to 31 March 2026.
• There will be additional tax relief for visual effects available from 1 April 2025, enabling eligible companies to claim an enhanced 39% rate of Audio-Visual Expenditure Credit on their UK visual effects costs.
• The Annual Tax on Enveloped Dwellings (ATED) chargeable amounts will be uplifted by the September CPI figure of 1.7% for the 2025-2026 tax year.
• Business rates for retail, hospitality and leisure businesses will be eligible for relief of 40% for the 2025-26 tax year, with support capped at £110,000 per business.
• Reforms to the taxation of Employee Ownership Trusts and Employee Benefit Trusts, taking effect from 30 October 2024. These reforms will prevent opportunities for abuse, ensuring that the regimes remain focused on encouraging employee ownership and rewarding employees.

Across the board, Late payment interest rates will increase by 1.5 percentage points from 6 April 2025. This will now be calculated on the base rate plus 4 percentage points.