Autumn Budget 2024: Key Changes and Their Impact

The Autumn Budget 2024, delivered by Chancellor Rachel Reeves, has made waves across the UK. This budget affects everyone, from start-ups to established corporations. It’s the Labour government’s plan to “fix the foundations” of the economy.

As the cost-of-living crisis continues to squeeze households and businesses alike, this budget brings both hope and challenges. With bold tax changes, targeted public spending, and new measures for businesses, it aims to strike a balance between boosting growth and funding essential public services. But with big shifts in National Insurance, inheritance tax, and support for small businesses, its impact will ripple across the country.

From potential savings on business rates to significant investments in health, education, and green energy, these reforms carry the promise of change. In this article, we will break down the Autumn Budget 2024 key changes, examining what they mean for you, your business, and the future of the UK economy.

Key changes in the autumn budget 2024

National insurance and income tax shifts

Employer National Insurance contributions have increased by 1.2 percentage points, to 15%. The threshold for these contributions has also been lowered to £5,000. The government views this as a levy on businesses, not individuals, despite expert warnings about the potential consequences for public bodies.

This change to National Insurance will affect businesses and raise £25bn. The government will increase the employment allowance from £5,000 to £10,500. This should prevent over 865,000 smaller businesses from paying NICs next year.

Personal income tax rates are unchanged. However, the freeze on income tax and National Insurance thresholds ends from April 2028. Future thresholds will then rise with inflation.

Capital gains and inheritance tax adjustments

The Autumn Budget 2024 changes Capital Gains Tax (CGT) and Inheritance Tax. Capital Gains Tax rates are now higher, with lower and higher rates for shares at 18% and 24%, respectively. This applies even to those considering opening up a cash ISA.

Inherited pension pots will be subject to inheritance tax after 2027. Business Asset Disposal Relief is also altered. From April 2026, the capital gains tax rate for disposals relief changes to match the main lower rate.

Support for businesses

The Autumn Budget 2024 offers some relief for small businesses. The Employment Allowance will increase from £5,000 to £10,500, offsetting the employer NICs increase. Further support includes potential reductions in business rates starting in 2026-27 for leisure, hospitality, and retail properties.

Public spending and investment

The budget includes investment in public services. This addresses concerns about schools, transport, and hospitals. Over £100 billion is earmarked for investments over five years.

This investment includes supporting life sciences job creation and the transition to electric vehicles. Capital spending increases for the NHS will go towards facility repairs and bed expansions, among other things.

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Conclusion

The Autumn Budget 2024 is a major change in fiscal policy under the current Labour government. Delivered by Rachel Reeves, It introduces changes that affect businesses, government activity, and individuals. These changes and measures announced encompass taxes, National Insurance, public spending, and support for specific sectors like life sciences.

The tax increases aim to fund essential public services such as the NHS. The actual effects on businesses’ profits and growth remain to be seen. Ultimately, the Autumn Budget aims to support crucial sectors like the NHS, life sciences, transport and tackle climate change with initiatives aimed towards more eco-friendly modes of transport, like electric vehicles. It will support employment through government activity within the life sciences, media centre, transport and electric vehicle sectors in regions such as Northern Ireland and Scotland.

With a focus on government activity that supports job growth and improvements to local services in line with what’s announced by the Scottish Government for Scotland, there’s an expectation for many positive changes throughout Northern Ireland also.

The Spring Budget will be the next announcement from the Labour government covering a further wide range of measures including private schools, corporate tax and fuel duty and what private jets can expect in terms of fuel duty and passenger duty (more commonly referred to as Air Passenger Duty).