Autumn Budget 2024 - Business headlines

Earlier today the Chancellor Rachel Reeves delivered her first Autumn Budget 2024.  Our Corporate tax team share their summary of the proposed changes which will affect businesses and their owners.  

Brief summary of the key business tax announcements

There are several hundreds of pages of documents issued behind the Budget Speech, so detailed analysis will take a while.  In the meantime, the headlines for businesses are:

• As reported in the press over the last few weeks, employer’s NIC is going up.  The rate will increase on 6 April 2025 from 13.8% to 15.0%.  Alongside this, the threshold from which it is paid will reduce to £5,000;
  
  
• A corporation tax roadmap has been issued, which essentially is committing the Government to not make any major changes to the taxation of companies.  This includes commitments to not increase the rate of corporation tax, maintain full expensing for capital expenditure and the Annual Investment Allowance;
  
  
• The Chancellor also confirmed the Government’s commitment to maintain the current rates of tax credits for qualifying R&D activities;
  
  
• Interest rates on late paid tax are increasing to discourage late payment.

There are several announcements that affect owner-managers.  As expected, the main rate of capital gains tax has today increased from 20% to 24%. Business Asset Disposal Relief has been maintained with a lifetime limit of £1million and a capital gains tax rate of 10%, however, this is only until April 2025, at which time it will increase to 18%.

More major changes were announced in respect of Inheritance Tax and, in particular, reliefs from the charge.  Many shareholders in private companies have obtained full relief from IHT due to the availability of Business Property Relief (“BPR”).  However, for chargeable events after 6 April 2026, full relief from IHT will only apply for the first £1million, after which only 50% relief will be available.