Budget 2024: what it means for you
The much-anticipated Autumn 2024 Budget has finally been announced and there are some big changes affecting individuals and businesses.
In this blog, we look at how Labour’s first Budget in 14 years will affect employment, business, housing and more.
Employment law changes
A rise in National Insurance for employers
The amount of National Insurance employers pay will rise from 13.8% to 15% from April 2025.
The threshold in which businesses start paying National Insurance on worker earnings will decrease from £9,100 to £5,000.
Although this change will affect employers in terms of what they pay their staff, further down the line, employees could face restrictions in wage rises and fewer benefits including the salary sacrifice scheme and statutory pension contributions.
Increased Employment Allowance for small businesses
The Employment Allowance currently allows eligible employers to reduce their annual National Insurance liability by up to £5,000. From April 2025, this will increase to £10,500, meaning an estimated 865,000 small employers and charities will not have to pay any National Insurance next year.
Minimum wage increase
The National Living Wage for those over 21 will rise by 6.7% from £11.44 to £12.21 from April 2025, providing an extra £1,400 a year for eligible full-time workers.
The National Minimum Wage will also increase significantly by 16.3% for those aged 18-20 from April 2025, with a rise from £8.60 per hour to £10.00 per hour, boosting eligible full-time workers’ pay by £2,500 a year.
Apprentices will benefit greatly as their wage is set to see an 18% increase in wages, hiking from £6.40 to £7.55 per hour.
Carer’s Allowance threshold raised
Those who earn more than £10,000 with caring duties are now eligible to apply for Carer’s Allowance, meaning tens of thousands of carers who have not been eligible will get an extra £81.90 a week under the scheme.
Contact our employment law solicitors
Our employment law solicitors advise both employers and employees. If you need advice on how the new changes could affect you, call us on 0117 325 2929 or complete our online enquiry form.
Changes that impact business owners contemplating exit
Capital Gains Tax
There was much speculation in the lead-up to the Budget about the potential changes to the Capital Gains Tax regime. The changes made are not as stark as some feared, with the lower rate for CGT rising to 18% and the higher rate to 24%. However, with this increase taking effect on and from 30th October, the lifetime limit of £1m for business asset disposal relief has stayed in place, but with the relief increasing to 14% from April 2025 and 18% from 2026.
The anticipated changes have already resulted in a flurry of deal activity in the lead-up to the budget, with clients who were in the middle of a sale process trying to complete these before the Budget took place. For those that didn’t make that deadline, sellers may not be too upset about the changes announced, but business owners contemplating an exit may still be incentivised to complete a sale before the increase to the current rate of BADR (Business Asset Disposal Relief) comes into effect in April 2025. Selling a business doesn’t happen overnight, and the process needs to be carried out with proper planning and professional advice.
Our commercial law solicitors are here to help
Our corporate and commercial solicitors support a wide range of businesses with their legal needs, helping them to protect their commercial interests. A core part of the team’s work is advising on exits including business and company sales. To speak to one of our commercial law solicitors, call us on 0117 325 2929 or fill out our online enquiry form.
Housing and property
Increase in stamp duty for second properties
From 31st October 2024, those who are buying an additional home or property in England and Northern Ireland will see the Stamp Duty Land Tax surcharge increase from 3% to 5%.
Affordable housing
Labour has pledged to boost £500m on new affordable housing, increasing the supply of homes and supporting small housebuilders as part of the Government’s Affordable Homes Programme.
Inheritance Tax
Both the nil-rate band and residence nil-rate bands on Inheritance Tax (IHT) will remain at £325,000 and £175,000 respectively until April 2030 (previously 2028).
The Labour Government has also announced that from April 2026, IHT will be charged at 20% on estates containing business and/or agricultural assets which are worth more than £1 million.
The Inheritance Tax rate remains at 40% on estates above the applicable thresholds, exemptions and reliefs. IHT is paid at a reduced rate of 36% on some assets if you leave 10% or more of the ‘net value’ to charity in your Will.
The rules for Inheritance Tax are not one-size-fits-all. For example, you can leave your estate to your husband, wife or civil partner when you die and there is no Inheritance Tax to pay. Any unused thresholds can be added to your partner’s allowance, so a married/civil partnership couple can potentially have a combined tax-free allowance of £1 million.
Pensions and shares
From April 2027, unspent pension pots will also form part of your taxable estate.
Any shares designated as ‘not listed’ on the markets of a recognised stock exchange, such as AIM (Alternative Investment Market), will qualify for 50% tax relief.
Further information
Not sure if these changes will affect you or your business? Our expert solicitors are here to help.
To speak to a member of our team, call 0117 325 2929 or fill out our online enquiry form.