An overview of the 2024 Autumn budget
The Autumn Budget introduced by Labour Chancellor Rachel Reeves brings significant shifts in financial policies affecting businesses and individuals. Here’s a summarised overview of its key impacts:
Implications for Businesses
Increased Employer Costs
National Insurance (NI) contributions will rise by 1.2%, taking the rate to 15% starting in April next year. The threshold for NI contributions will also be reduced to £5,000, intensifying cost pressures on businesses.
Minimum Wage Increases
Effective April 2025, wages will see substantial hikes:
- 21 and over: £11.44 to £12.21 per hour.
- 18-20: £8.60 to £10 per hour (the largest increase in this age group).
- Apprentices: £6.40 to £7.55 per hour.
Susan Mayall, Employment Law Solicitor and Partner at Pearson Solicitors says:
“Whilst these are higher operational costs for business owners the benefits of higher employee earnings could reduce the need for multiple jobs among workers to make ends meet.
“Despite these rises, relief is provided by allowing micro and small businesses to employ up to four workers at the National Living Wage without paying NI contributions, offsetting some increased costs.”
Estate Planning and IHT Changes
Inheritance Tax (IHT)
- The IHT threshold remains at £325,000 until 2030, but starting in 2027, inherited pensions will be included in the taxable estate, potentially pushing more estates above the tax-free limit.
- Specific allowances, such as the residential nil-rate band (up to £500,000) and combined allowances for spouses or civil partners (up to £1m), will be affected by these changes.
- From April 2026, some tax will apply to business and farm assets over £1m.
Legal Adviser Lucy Roughley explains more about the changes to Inheritance Tax here
Capital Gains Tax (CGT)
- Basic rate taxpayers will see CGT increase from 10% to 18%.
- Higher rate taxpayers will experience an increase from 20% to 24%.
- Business Asset Disposal Relief will also rise from 10% to 18%.
Property Stamp Increases
Immediate increase for purchases involving buy-to-let properties, second homes, or residential property acquisitions by companies, with rates jumping from 3% to 5% as of October 31.
How can we help?
As a multi-disciplined law firm, Pearson Solicitors offers strategic advice and solutions for navigating these regulatory changes in business operations and estate planning. Contact our legal experts on 0161 785 5000 or email enquiries@pearsonlegal.co.uk
Subscribe to our newsletterPlease note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
