UK Autumn Budget 2024 is presented by Chancellor Rachel Reeves which includes some notable tax measures, and policies for sustaining the current response to emerging issues. Such change will be common to every ordinary earner provided that income, the property-owning people of the United Kingdom, and business oriented investors. Here are how the strategic spheres of the 2024 budget and how it might affect taxpayers in UK:

Key Changes in the Autumn Budget 2024

1. Capital Gains Tax (CGT)

– Several debt objects require an important rise of policy rates according to the budget. They have been increased to 18% for the lower band of CGT rates and 24% for the higher band of CGT rates, where disposal is made on or after 30 October 2024. Filing and computation of CGT remains simple with rates of 18% and 24% for selling residential properties Nonetheless, it applies higher rates to gains accumulated on other forms of asset.

– It remains as Business Asset Disposal Relief (BADR) in 2024, it remains at 10% for gains up to £1 million. For disposals greater than £1 million, it will, however, increase to 14 per cent in April 2025 and, further to 18 per cent in April 2026.

2. National Insurance Contributions (NICs)

Employer’s NICs arise when the contribution rate rises from 13.8% to 15% with the financial year April 2025. However, the net zero at which NICs are not paid will be increased to £8,200 when the employee is paid his salary and the rate at which employers will start to pay NICs on employee’s wages will be reduced from the current rate of £9,100 to £5000 level.

–Emerging Employment Allowance has been increased to support businesses that are small and have been established to £5, 000 to £10, 500. What this means is that any eligible employer can minimize their NIC burden upto this percentage.

3. Income Tax Adjustments

Preliminary income tax rates will continue to be frozen at £12,570 while NIC thresholds are to be increased annually in accordance with rates of inflation effective from 2028/29. The shift in taxation policy is expected to reduce taxation by STA and ease the burden of the ever-rising taxation system to employees and self-employed individuals.

4. Inheritance Tax (IHT)

– Main rates for IHT continue at the £325,000 nil-rate band, which has been frozen until 2030 estate’s liabilities will go up as property prices increase. Further, transferred assets will be charged with IHT from April 2027; this will be a significant change that has implications on retirement funding.

5. Stamp Duty Land Tax (SDLT)

– The SDLT surcharge of higher rates of additional residences which is normal for property land investors and second home has increased to 3%, 5%; from October 31, 2024. However, those that occurred before the aforementioned date will not be affected in any way at all.

6. Minimum Wage Increases

There is increasing workers’ minimum wages above 21 years to 6.7 percent from April next year from £11.44 to £12.21 per hour. This change benefits the lower-paid employees but can pose a test to the employers, with the focus being SMBEs especially within the hospitality industry.

7. AIM Shares and Business Property Relief

The relief rate will subsequently be cut to half by which AIM shares will become unfavorable for tax planning as from April 2026. Subsequently they find it is possible for the investment investors using AIM shares initially exempted to undergo a 20% IHT exposure.

How These Changes Will Affect Taxpayers

Taxpayers in particular must learn these changes in order to adopt them in their financial and tax planning for the future years. Below are some of the impacts:

- Increased CGT Rates: The opportunities of the sale of the assets will attract more taxes for the equivalent of the persons willing to sell the assets because a major share of the profit shall be paid to the revenue collector. With regards to time allocation during tax planning, maybe it is good to consider this is when to sell an asset or when to claim tax relief.

- Employer NICs and Employment Allowance: Employers’ NICs rise as the contribution rate goes to between 15% up to April 2025. But from now to the time employees are paid their wages it has risen from £9,100 where NICs are not paid to £8,200 The entrance point through which employers can be able to pay NICs for employees’ wages will also be changed from £9,100 to £5,000.

- Inheritance Planning: This is because there may be a new reason to review estate planning with inherited pension set to fall under the IHT from 2027. The implication that is made to the forecast reduction of future IHT liabilities could be attained is that individuals take the pension fund at an early stage of life, or other tax efficient products.

- Increased SDLT for Property Investors: Higher SDLT rates possibly reduce the UK housing market speed of second homes and investment properties because of the reduced participation of some buyers. Buyers should complete their purchase before 31st of October to escape the wrath of this extra surcharge.

How Tax VAT Return Can Help You Guide These Changes

In the light of our competency as a Tax Vat Return expert now, it is about time to reveal to you further meaning of what the next UK Autumn Budget 2024 shall be. As for members of our team, we have professionals in taxation and thus the client can get legal compliance as well as be guided on how to handle this or that situation when it comes to taxation as well as make necessary preparations in advance. Here’s how we can assist:

- Capital Gains and Property Tax Planning: With these new rates it becomes all the more crucial for our clients to look for opportunities to minimize CGT and we help our clients finding it. We also assist property investors on issues to do with SDLT reforms and assist them to note the appropriate structures for property investment.

- Inheritance Tax Advice:  For the clients who have been impacted on the IHT freeze and the changes in pension IHT rules, we offer full estate planning services to protect your wealth, to maintain your vision for your family and business.

- Employer NICs and Employment Allowance Guidance: We help organizations to determine the effects of NIC changes and how to maximize the Employment Allowance whilst rationalizing the payroll function.

- Personalized Financial Planning: Focusing on possible changes in tax thresholds and allowances we give recommendations on the regulation of taxable income and pension contributions, ways to enhance the usage of tax reliefs for the increase in tax optimization rates.

The UK Autumn Budget 2024 unveils new changes in taxes and thresholds which will affect both high and low earners as well as the asset owners. When you know these changes and consult with a competent Tax ACT ADVISOR such as Tax VAT Return, then you and I will be ready for such changes and make right decisions that will protect your financial needs.

Call Tax VAT Return now to learn how this budget will affect your personal financial situation and what you can do to minimize your taxes for the coming year.