The Autumn Budget introduced significant fiscal measures to address the nation’s economic challenges. From changes in tax policy to investments in key sectors, this year’s announcements are set to affect individuals, businesses, and public services alike. Here’s a concise view of the most significant updates and what they mean for you.

Taxation changes

• Employers’ national insurance contributions (NICs): From April 2025, the rate will increase to 15% on salaries above £5,000, up from the current 13.8% on salaries above £9,100. This adjustment is projected to raise an additional £25 billion annually.
• Capital gains tax (CGT): The basic rate on profits from selling shares will rise from 10% to 18%, and the higher rate will increase from 20% to 24%. These changes align CGT rates more closely with income tax rates.
   
• Inheritance tax (IHT): The IHT threshold freeze was extended until 2030. Additionally, from April 2027, unspent pension pots will be included in the taxable estate, potentially increasing IHT liabilities.

Personal income and wages

• National minimum wage: Effective April 2025, the minimum wage for workers aged 21 and over will rise by 6.7% to £12.21 per hour. This increase aims to support low-income workers amid rising living costs.
• Income tax thresholds: The current thresholds will remain unchanged until 2028, after which they will rise in line with inflation. This measure is intended to prevent more individuals from moving into higher tax brackets due to wage inflation.

Business and corporate measures

• Corporation tax: The main rate remains at 25%, maintaining the status quo for business taxation.
• Employment allowance: To support small businesses, the allowance will increase from £5,000 to £10,500, providing additional relief on NICs.

Sector-specific updates

• Hospitality and retail: The budget introduces a 1p cut in duty on draught alcoholic drinks, aiming to support pubs and the hospitality sector. However, duties on non-draught alcoholic beverages will increase.
• Transport: The freeze on fuel duty continues for another year, offering motorists relief. Conversely, England’s cap on single bus fares will rise from £2 to £3 starting inJanuary 2025.

Public services and investments

• Healthcare: An additional £22.6bn was allocated to the NHS to address waiting times and enhance services.
• Education: The budget provided £6.7bn in capital investment, including £1.4bn dedicated to rebuilding over 500 schools.

Economic outlook

The Office for Budget Responsibility (OBR) forecasts economic growth of 1.1% for this year, with an increase to 2% in the following year. Inflation is expected to average 2.5% this year, gradually decreasing to 2.3% by 2026.

The Autumn Budget implemented substantial tax reforms and public spending initiatives to stabilise the economy and support public services. These measures reflect the Government’s strategy to balance fiscal responsibility with the need for investment in key sectors.

Seek advice

At FMA, we understand that navigating the changes introduced in the Autumn Budget 2024 can feel overwhelming. That’s why we are committed to supporting our clients every step of the way. Whether you’re a business owner adapting to revised tax policies, an individual managing personal finances, or part of a larger organisation strategising for the future, our team is here to provide expert guidance.

With tailored advice and practical solutions, we’ll help you stay compliant, maximise opportunities, and make informed decisions to secure your financial stability and growth in the wake of these new measures. Let us partner with you to turn these challenges into opportunities for success.

Struggling to make sense of the key Budget announcements and how they will affect you? Get in touch with us.