Budget 2024

Summary:

The Chancellor started her Budget speech, by saying “the only way to drive economic growth is to invest, invest, invest.”  Rachel Reeves added that the Office for Budget Responsibility (OBR) forecasts that the economy will grow by 1.1% in 2024 and by 2% in 2025. 

Reeves argued that the Labour government would put “more pounds in people's pockets” and accused the Conservatives for 'failing' the country. She said “We must restore economic stability and turn the page on the last 14 years.”

Some of the key tax measures include:

• Modernise HMRC’s systems and recruit additional HMRC compliance and debt staff
• Crack down on umbrella companies and increase the interest rate on unpaid tax debt
• Tackle tax-avoidance schemes
• Raise employer NICs by 1.2% points to 15% (reducing the secondary threshold from £9,100 to £5,000)
• End the freeze on income tax thresholds after 2028
• Increase capital gains tax: the lower rate will rise from 10% to 18%, and the higher rate from 20% to 24% (Property rates will remain the same)
• Raise the carried interest tax rate to 32%
• Extend the inheritance tax threshold by two years to 2030. From April 2026, the first £1m of combined business and agricultural assets will remain exempt from inheritance tax; for assets over £1m, a 50% relief will apply at an effective rate of 20%
• Close loophole by bringing inherited pensions into inheritance tax from April 2027
• Abolish the non-dom tax regime
• Reform stamp duty by increasing the levy on second homes from 3% to 5%
• Increase the windfall tax on oil and gas giants
• Freeze fuel duty
• Introduce a tax on vaping liquid from October 2026
• Reduce duty on draught beer
• Increase air passenger duty for private jets by 50% and £2 for economy-class
• Introduce VAT on private school fees
• Increase the soft drinks industry levy
• Cap corporation tax at 25%
• On business rates, from 2026-27, the government will introduce two permanently lower tax rates for retail, hospitality and leisure properties, paid for by a higher multiplier for the most valuable properties

Relevant Documents:

Autumn Budget 2024 in full

Autumn Budget 2024 Policy Costings

Corporate Tax Roadmap

OBR Review of the March 2024 forecast for departmental expenditure limits

CIOT's reaction:

• The CIOT has warned that the increase in employers’ national insurance announced today could have unforeseen consequences.
• The CIOT has reacted to changes to inheritance tax, capital gains tax and taxation of non-doms in the Budget. 
• CIOT's Scottish response to the UK Budget.
• The CIOT has welcomed the government’s attempts to provide more predictability to companies through the Corporate Tax Roadmap. However, a narrow focus and the lack of a clear statement of strategic aims misses a trick for greater coherence across business taxation and wider government priorities. 
• The CIOT has welcomed Budget’s investment in HMRC to reduce the tax gap, but is concerned that the lack of additional investment in customer service will prejudice those needing support to get their tax right. 

LITRG's reaction:

• LITRG has responded to Budget announcement that from April 2026 recruitment agencies, or end clients where there is no agency, will be responsible for accounting for PAYE tax and NIC on payments made to workers that are supplied by umbrella companies
• LITRG has expressed concern in response to the Budget announcement that the income threshold for having to join Making Tax Digital for Income Tax is to be lowered from £30,000 to £20,000.

ATT’s reaction:

• On the fuel duty freeze, our sister organisation, ATT, emphasises the importance of a government plan to "fill the pothole" diminishing fuel duty revenues as the freeze is extended for another year.