Budget Summary 2024
Tax rises
The Chancellor has confirmed taxes will be rising by £40 billion in her Budget.
Employers’ National Insurance
Reeves has announced she will increase employers’ national insurance by 1.2% (to 15%) to raise £25 billion. The secondary threshold has been reduced from £9,100 per year to £5,000.
Stamp Duty
The Stamp Duty surcharge on second homes will rise by 2% to 5% from 31 October 2024 onwards.
Income Tax
Reeves has announced she will not freeze the income tax thresholds beyond 2028 meaning that thresholds will grow thereafter.
Business Rates relief
The Chancellor has confirmed private schools will lose business rates relief from April 2025. This is in addition to VAT being added to school fees.
Minimum Wage
The Chancellor says the National Living Wage for those aged 21 or older will rise from £11.44 per hour to £12.21 from April 2025, a rise of 6.7%. For those aged between 18 and 20 years old, the National Living Wage will increase from £8.60 to £10 per hour and apprentices will see their hourly pay increase to £7.55 (up from £6.40).
Carer’s Allowance
The carer’s allowance will increase to the equivalent of 16 hours at the National Living Wage per week, up from £81.90 per week. A carer can now earn over £10,000 per annum, up from just shy of £8,000.
Capital Gains Tax
Capital Gains Tax is rising from 20% to 24% for the higher tax band and from 10% to 18% for the lower rate.
Inheritance Tax
Inherited pensions will be brought into the scope of IHT from April 2027.
From April 2026, the first £1 million of combined business and agricultural assets will not attract IHT. For such assets over £1 million, IHT will apply with 50% relief, at an effective rate of 20%.
Inflation
Inflation is now forecast to be 2.5% this year and 2.6% next year.
Other measures
From the £40 billion in tax rises, spending on public services will grow by 1.5% in real terms. £240 million will be invested in local services to get people back to work. The freeze on fuel duty will be kept in place for another year. £230 million will be used to tackle homelessness across the UK. The duty on draft beer will be cut by 1.7%. £11.8 billion has been announced for infected blood victims plus £1.8 billion for the Post Office/Horizon victims. £3 billion will be in place for Ukraine every year for “as long as it takes”. £3.4 billion will be allocated to improve public services in Scotland, £1.7 billion for Wales and £1.5 billion for Northern Ireland in 2025/26. The Budget also pledges over £5 billion in housing, funding for HS2 to go to Euston, a £3.4 billion warm homes plan, a £6.7 billion investment to the Department for Education next year and a 50% increase on air passenger duty for private jets. Funding (£22.6 billion) will be allocated to help deliver an extra 40,000 elective NHS appointments per week. The Chancellor has also announced £3.1 billion in capital NHS spending in 2024 and 2025.
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