Lots of speculation, but it's finally over - what are the key points?
There will be lots of post-budget analysis over the next couple of days. We've done what we always do, tried to keep it simple. We've split it into the main points that will impact businesses and those that will impact people.
Businesses
The employment allowance for increases from £5,000 to £10,500.
Corporation Tax rates to remain the same .
Increased Employer National Insurance contributions to 15% (from 13.8%) from April 2025. The threshold above which Employers pay National Insurance has also dropped from £9,100 to £5,000.
National living wage increases to £12.21 per hour from April 2025.
People
The rate of income tax, National Insurance and VAT remain unchanged.
Personal allowance (the amount your can earn before paying income tax) will rise with inflation after 2028, it remains frozen until then.
An increase in the basic rate of Capital Gains Tax payable on asset disposals (except non-residential property) from 10% to 18% and the higher rate rises from 20% to 24%. There is no change to the rates of Capital Gains Tax on residential property disposals.
The lifetime limit of £1m remains for Business Asset Disposal Relief (BADR) but the current rate of 10% increases to 14% from April 2025 and to 18% in 2026/27.
Inheritance tax threshold remains frozen until 2030.
Unspent pension pots will be subject to inheritance tax from 2027.
Inheritance tax exemptions on farmland and business property will be less favourable from 2026.
Basic and new state pension payments to go up by 4.1% next year.
Fuel duty frozen.
VAT will be introduced on private school fees from January 2025.
Non-domicile status has been abolished.
Who will be impacted most?
Everyone will see an impact in some way. But those that face the biggest tax changes are:
Anyone looking to sell assets (non-residential property).
Individuals (and their families) that have unspent pension pots, businesses or agricultural property.
Businesses with several staff on the current national living wage.
Businesses who currently pay more than £10,000 per year in Employers National Insurance.
Individuals paying for private education.
Conclusion
Budgets always introduce change, some will be better for people than others. All we can do is choose how we respond. We aim to make sure you are better prepared to deal with change. If you would like to discuss anything with us further, feel free to book a call.
Other points were announced and each of the above comes with more detail. The above is intended to provide a snapshot of the key areas.