
31 Oct Budget 2024: Key Highlights and Changes
Posted at 21:08h
in News
Chancellor Rachel Reeves, making history as the UK’s first female Chancellor, delivered Labour’s first budget in over a decade, outlining plans to boost the economy, enhance public services, and create a fairer tax system.
With a projected £40 billion increase in taxes, the budget prioritises public investment, healthcare funding, and wage support while making significant adjustments to business rates, national insurance, and other tax policies.
Here’s a concise look at the key measures set to impact the UK.
Economic Overview
- Growth: UK economy expected to grow 1.1% in 2024, 2% in 2025, and 1.8% in 2026.
- Inflation: Forecasted to average 2.5% in 2024 and 2.6% in 2025, targeting a gradual decline to 2% by 2029.
Tax Changes
- National Insurance: Employers’ rate rises from 13.8% to 15% starting April 2025, with the threshold reduced from £9,100 to £5,000.
- Capital Gains Tax: Lower rate increased to 18 % and higher rate increased to 24% on shares and assets. Business Asset Disposal Relief and Investors Relief rates to rise to 14% in 2025 and 18% in 2026.
- Inheritance Tax: Threshold freeze until 2030; inheritance tax extended to certain pensions and agricultural assets.
- Non-Dom Tax Regime: Abolished and to be replaced with a new residence-based system, the 50% discount on foreign income in the first year from April 2025 is removed.
Wages and Support
- Minimum Wage: Increased to £12.21 per hour for those aged 21+, phased to a single adult rate of £10 for younger workers.
- Carers’ Allowance: Earnings limit raised to match 16 hours at the national living wage.
- Fuel Duty: Frozen with a 5p per litre cut extended for another year.
Business and Employment
- Business Rates Relief: 40% relief for retail, hospitality, and leisure sectors capped at £110,000 through 2026.
- Investment Allowance: The main allowance for North Sea oil and gas removed, with a windfall tax increase to 38%.
- Double-Cab Pick-Ups: Another U-Turn, from April 2025 double-cab pick-ups with a payload of 1.0t or more will be classed as cars for the purposes of capital allowances, benefit in kind, and some deductions from business profits. This will only apply to purchases made from April 2025.
Public Services and Investment
- NHS Funding: £22.6 billion boost to day-to-day NHS spending, targeting reduced waiting times.
- Education: Core schools budget rises by £2.3 billion, with a £6.7 billion capital investment including school repairs.
- National Wealth Fund: £1 billion for aerospace, £2 billion for automotive, and £520 million for life sciences manufacturing.
Infrastructure and Housing
- Housing Investment: £5 billion for housing in 2025-26, with 1.5 million homes targeted by end of parliament.
- Transport Upgrades: Funding for Manchester rail routes, potholes, and London Euston HS2 tunneling.
Environmental and Social Policy
- Warm Homes Plan: £3.4 billion for home insulation and energy efficiency, helping reduce bills for over 225,000 households.
- Vaping Tax: Introduced at £2.20 per 10ml, alongside increases in tobacco taxes.
Other Measures
- Compensation Funds: £11.8 billion for infected blood scandal victims and £1.8 billion for the Post Office Horizon scandal.
- VAT on Private Schools: VAT exemption on private school fees removed from January 2025.