Key points from Labour’s 2024 Budget:
-New Covid Corruption Team to tackle false claims for Covid support loans and grants
-Substantial increase in the number of HMRC compliance staff; with specialist anti-avoidance teams being given additional funding to combat non-compliance; as well as far more focus on targeting tax avoidance operators and tax avoidance schemes
-National Minimum Wage increase to £12.21 per hour for employees aged 21 and over, and £10 per hour for 18-20 year olds
-More protection for working people from ‘unfair dismissal’
-Fuel Duty freeze to continue in 2025
-Employee’s NIC remains same
-Income tax to remain the same
-No changes to VAT rules, except for charging VAT on Private School fees (see below)
-Employer’s NIC to increase from 13.8% to 15% in April 2025
-Secondary NIC threshold to reduce to £5,000
-Employment Allowance increasing from £5,000 to £10,500 per employer
-Capital Gains Tax lower rate on non-residential property for ‘basic rate taxpayers’ increased from 10% to 18%
-Capital Gains Tax higher rate on non-residential property for ‘higher rate taxpayers’ increased from 20% to 24%
-Capital Gains Tax on residential property remains unchanged at 18% and 24% (Main residence remains exempt from CGT as usual)
-Lifetime limit on Business Asset Disposal Relief maintained at £1million
-Business Asset Disposal Relief tax rate to remain at 10% this tax year, before rising to 14% in 2025-26 and increasing to 18% in 2026-27
-EIS scheme and VCT schemes extended to 2035
-Inheritance tax threshold frozen for next 6 years; with £325,000 nil rate band to stay in place; in addition to £175,000 residential allowance for IHT when residential property is passed down to direct descendants
-Inherited pensions brought into scope of inheritance tax from 2027
-APR and BPR Relief reformed so that combined agricultural assets exceeding £1million fall within scope of inheritance tax with 50% tax relief; giving an effective tax rate of 20% from April 2026
-For shares on Alternative Investment Market: 50% tax relief given in respect to inheritance tax; bringing tax rate down to 20%
-Tobacco duty ‘escalator’ maintained for remainder of this government, increasing in line with RPI plus 2%
-Increase duty on rolling tobacco by 10%
-Flat Rate Duty introduced on all vaping liquid from October 2026
-One-off increase in tobacco Duty
-Increase in soft drinks levy
-Electric Vehicle incentives maintained for company cars to support take-up of electric vehicles and increase differential between fully electric and other vehicles from April 2025
-Private Jets face increased air passenger Duty by a further 50% from April 2025
-from 2026-27 two new lower tax rates for retail, hospitality and leisure properties introduced funded by a ‘higher-multiplier’ on the ‘most valuable properties’.
– 40% relief on business rates given for retail, hospitality, and leisure industry up to a cap of £110,000 per business
– ’small business tax multiplier’ frozen next year
-Alchohol duty rates on non-draught products to increase in line with RPI from Feb 2025
-Cutting Duty on draught drinks by 1.7% saving a penny on a pint in the pub
-Cap Corporation Tax at 25% for larger companies for duration of this parliament
-Maintaining full expensing of qualifying capital purchases and Annual Investment Allowance at £1 million remains in place
-Non-Domicile Tax Status regime to be abolished and “outdated concept” removed from tax system from April 2025
-New Residency based tax scheme from April 2025
-Increasing Stamp Duty Land Tax surcharge for 2nd or more properties, the ‘higher rate for additional dwellings’ increasing by 2% points from 3% to 5% from 31st October 2024
-Energy Profits Levy on oil and gas industry increasing to 38%, expiring March 2030
-VAT introduced on private school fees in January 2025
-business rates relief removed for private schools from April 2025
-No extension to freeze on Personal Allowance and income tax thresholds beyond that already decided by previous government to April 2028