What to expect from the Autumn Budget 2024

With a reported £22 billion financial hole to fill, the Government will need to make significant changes to balance the nation’s books. Many commentators anticipate the Government may look at plugging the gap in the public finances by increasing taxes. Therefore, individuals, business owners and limited companies should brace themselves for some announcements that could affect them. 

Although we have looked at what some potential changes may be, we will all have to wait until 30th October to find out what exactly is in the Chancellor’s red box.  

Shortly after Ms Reeve has delivered her Budget, you will be able to find out how it will affect you and your business in our easy to digest TaxAssist Accountants budget summary.  

What announcements could this Budget include? 

Inheritance Tax 

One tax widely expected for change is Inheritance Tax (IHT). The Chancellor could consider making the following changes: 

• Changes to IHT reliefs  

We might see changes to some valuable IHT reliefs. For example, we could see changes to or the axing of Business Property Relief (BPR) and Agricultural Property Relief (APR). 

• Reduction of IHT Nil Rate Band 

The Government could reduce the tax-free IHT threshold ‘nil rate band’ from the current amount of £325,000. It could also change the Residence Nil Rate Band. 

• Increase in IHT rate 
• Bringing pension pots into scope for IHT 
• Reform the capital gains at death rules 

Capital Gains Tax  

Another highly anticipated tax to see changes is Capital Gains Tax (CGT). Changes to CGT we could see announced in the Autumn Budget include: 

• Increase in the CGT rates  

The Government might change the current rates of CGT, which could see an increase in tax when selling or disposing of eligible assets. 

Reports suggest the Chancellor might consider raising the CGT rate on certain assets, such as selling shares. However, the CGT rate on selling second homes and buy-to-let properties may not change. 

• CGT relief withdrawal  

The Chancellor may instead opt to make changes to CGT reliefs, such as Business Asset Disposal Relief (BADR). This could see entrepreneurs facing higher tax bills when they exit their business.   

Employers National Insurance 

This Budget could include an increase in the rate of employers’ national insurance (NI) on staff salaries. It had been confirmed that this was not in the Labour Party manifesto, which had said there would be no "increase in the key taxes paid by working people."  

Employers National Insurance on pension contributions 

The Government could look at imposing an employers’ national insurance (NI) burden on employers’ pensions. Currently, employers don’t pay NI on pension contributions. Changing this would make the cost of employing people more for employers. This could have a knock-on effect on the attractiveness of salary sacrifice schemes to employers. 

Pension tax relief 

The Government may look at scrapping higher and additional rate tax relief on pension contributions, replacing it with a flat rate. It could also look at altering the amount of tax-free cash that could be withdrawn from individual pension pots, but any change in this area is likely to face strong opposition and be technically challenging to implement. 

Business taxation roadmap 

A business taxation roadmap will be published on Budget Day, providing “a long-term framework to tax policy, lending businesses the certainty and clarity to invest and plan effectively.” The roadmap should include:  

• Corporation Tax rates  
• Capital allowances, including permanent full expensing  
• Reform of the business rates system  

Corporation tax 

Ms Reeves has confirmed the main rate of corporation tax will be capped at 25% for the duration of this Parliament, giving certainty to businesses.  

The main rate of corporation tax is applicable to relevant businesses with profits exceeding £250,000. The Government could look at changing the threshold when the 25% main rate of corporation tax kicks in. 

Dividend allowance 

The dividend allowance offers tax-free dividend income for individuals - for the 2024/25 tax year, the allowance is £500.  

Many reductions in the relief, since its inception in 2016/17, have made the dividend allowance much less valuable. The Chancellor may still feel tempted to make further changes.  

ISAs 

The Spring Budget in 2024 announced a new ISA which would increase ISA limits for individuals from £20,000 per annum. Speculation indicates the new ISA will be scrapped and the Treasury have confirmed that: “The Government will provide further information on its plans for the British ISA in due course.” 

The Government may look at reducing the ISA allowance of £20,000.  

Fuel duty 

Fuel duty has been frozen since 2011/12, aside from a temporary cut in 2023/24 and 2024/25. The headline rate for standard petrol and diesel is 52.95p/litre. The Government may raise fuel duty rates or end the temporary 5p reduction. This would lead to a rate of 58p per litre. 

Benefit in Kind 

The Budget could be used to announce changes to benefit in kind tax rates on employee and director benefits. Increasing taxes on vehicles emitting higher CO2 levels could be one potential option. 

What do we already know? 

Winter Fuel payment 

The Winter Fuel payment, which was previously paid to pensioners of a certain age, will be cut for those not receiving pension credit and other means-tested benefits. 

Non-dom status  

The removal of ‘non-dom’ status was announced in the Spring Budget 2024. The Government has confirmed it will look more closely at the previously announced transitional rules.  

VAT exemption for private schools  

In July 2024, the Chancellor announced the end of private school VAT exemptions. Private school fees and boarding fees will be subject to VAT at the standard 20% rate with effect from 1st January 2025. 

Sign up for our Autumn Budget newsletter 

While the above is speculation, there will be changes announced at the Autumn Budget 2024. TaxAssist Accountants will provide you with fast, accurate and concise summary on the day of the Budget. If you are not already a subscriber to our newsletter, register here to receive this straight to your email inbox.  

Date published 17 Oct 2024 | Last updated 17 Oct 2024

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