The Chancellor, Rachel Reeves, announced the Autumn Budget. We summarise the main headlines for businesses and individuals.
Business taxes
- Corporate Tax Roadmap: The government’s roadmap includes a commitment to: cap Corporation Tax at 25%, to maintain the Small Profits Rate and marginal relief at current rates and thresholds, to maintain full expensing, the Annual Investment Allowance, R&D relief rates, and the Patent Box, providing certainty for businesses.
- VAT: No changes to rates or registration and de-registration thresholds.
- VAT: From 1 January 2025, private school fees will be subject to VAT at 20%.
- Business rates: The small business multiplier will be frozen for 2025/26 at 49.9p. The standard rate multiplier will increase to 55.5p.
- Business rates: Retail, hospitality and leisure properties will receive 40% relief in 2025/26 (up to £110,000 per business) and from 2026/27 these businesses will benefit from permanently lower business rates.
- Business rates: Charitable rate relief will be removed from private schools from April 2025.
- Independent Film Tax credit: From 1 April 2025, UK films with budgets under £15 million and a UK lead writer or director that began filming on or after 1 April 2024 will be able to claim an enhanced 53% rate of Audio-Visual Expenditure Credit.
- Tax reliefs for theatres, orchestras, museums and galleries: From 1 April 2025, rates will be set at 40% for non-touring productions, and 45% for touring productions and all orchestra productions.
- Capital allowances: The 100% First Year Allowances (FYA) for qualifying expenditure on zero-emission cars and the 100% FYA for qualifying expenditure on plant or machinery for electric vehicle charge points will be extended for a further year until 2026.
Personal taxes
- Income tax: The earnings threshold will not be frozen beyond that already promised. From April 2028, the threshold will be increased in line with inflation.
- Employees' National Insurance contributions: No changes to the threshold or rates. But, from April 2028, the threshold will be increased in line with inflation.
- Employers’ NICs: The rate will increase by 1.2 percentage points to 15% from April 2025 and the threshold at which secondary Employers’ NICs become payable will be reduced to £5,000.
- Self-employed National Insurance: No changes.
- Employment allowance: This will increase from £5,000 to £10,500 from April 2025. The £100,000 threshold will also be removed, meaning the allowance will expand to all eligible employers.
- Unpaid taxes: The interest charged on late payment of taxes will increase by 1.5 percentage points from April 2025.
- Non-domiciled taxation: This tax regime will be scrapped from April 2025 and replaced with a new residence scheme. The Temporary Repatriation Facility will be extended from two to three years.
- Capital Gains Tax: Investors’ Relief will be reduced to £1 million on all disposals made on or after 30 October 2024.
- Capital Gains Tax: The lower rate will increase from 10% to 18% and the higher rate will increase from 20% to 24% from April 2025.
- Business asset relief and Investors relief: Both reliefs will increase to 14% from April 2025 and again in April 2026 to 18%, bringing it in line with the lower rate of CGT.
- Capital Allowances: The 100% first-year allowances for qualifying expenditure on zero-emission cars and plant and machinery for electric vehicle charge points has been extended until 2026.
- New British ISA: Following consultation, this will be scrapped.
- Inheritance tax: The current £325,000 nil rate band and £175,000 residence nil rate band will be fixed for a further two years beyond 2028, until April 2030.
- Inheritance tax: This will be extended to cover unspent pension pots.
- Inheritance tax: Agricultural Property relief will be extended to land managed under certain environmental agreements.
Duty rates
- Fuel Duty: Rates of fuel duty have been frozen for 2025/26 and the temporary 5p cut in fuel duty will remain for another year until 22 March 2026.
- Alcohol Duty: Rates on draft products below 8.5% alcohol will be cut by 1.7% from 1 February 2025.
- NEW Vaping Products Duty: From 1 October 2026, a new flat-rate duty of £2.20 per 10ml of vaping fluid will be introduced.
- Tobacco Duty: From 6pm on 30 October, the duty will increase by an equivalent of £2.20 per 100 cigarettes or 50g of tobacco and the tobacco duty escalator will be renewed at RPI+2% on all tobacco products until the end of this Parliament.
- Air Passenger Duty: APD will be increased by £1 for domestic flights, £2 for those flying economy on short-haul flights and £12 for long-haul flights from 2026/27. The higher rate of APD that applies to private jets will increase by 50% from 2026/27. From then on, all rates of APD will increase in line with forecast RPI.
- Stamp Duty Land Tax: From 31 October 2024, the Higher Rates for Additional Dwellings will increase by 2 percentage points to 5%. SDLT on the purchase of dwellings costing more than £500,000 by corporate bodies will also be increased by 2 percentage points to 17%.
- Energy Profits Levy: From 1 November 2024, this will increase by 2 percentage points to 38%, the investment allowance will be abolished, and the rate of decarbonisation allowance will be set at 66%.
- Soft Drink Industry Levy: From April 2025, this will increase annually to reflect CPI increases.
Other announcements
- National Living Wage: From April 2025, NLW and National Minimum Wage will both increase. The hourly rates will be: £12.21 for those aged 21 and over; £10.00 for 18-20-year-olds; and the rate for 16-17-year-olds and apprentices in the first year of their apprenticeship will increase to £7.55 an hour. The accommodation offset will also increase to £10.66 per day.
- Business Tariff Suspensions: These will be extended until June 2026.
- Industrial strategy: A new green paper has been published this month identifying eight growth-driving sectors, with plans for each to help them thrive.
- Carbon capture: The government has announced £3.9bn in 2025/26 for the first carbon capture and storage clusters.
- Enterprise Investment Scheme (EIS) and Venture Capital Trust: Both schemes have been extended until 2035.
- Child benefit reform: The government will not proceed with the reform to base the High Income Child Benefit on household incomes.
- Employment Rights Bill:There will be a new right to bereavement leave, and paternity and parental leave will become a day one right.
- State pensions: The triple lock will increase the state pension and pension credit by 4.1% in 2025/26.
- Bus fare cap: This will be extended until December 2025 at a higher rate of £3.
- Alcohol Duty Stamps Scheme: This will be abolished from 1 May 2025.
