Rachel Reeves made history yesterday, delivering the 2024 Autumn Budget as Labour’s first female Chancellor.
Her proposals target a £22bn gap in public finances, with new tax measures expected to raise an estimated £40bn. Here are some of the major changes:
1. Personal Taxes
- Income tax and National Insurance (NI) rates remain unchanged; income tax thresholds to rise with inflation after 2028.
- Basic rate of capital gains tax increases from 10% to 18%, with higher rates moving from 20% to 24%.
- Inheritance tax thresholds remain frozen until 2030, with unspent pensions included from 2027.
2. Business Taxes
- Employers’ NI rises to 15% on salaries above £5,000, generating £25bn per year.
- Employment Allowance for small businesses increases from £5,000 to £10,500.
- Corporation tax stays at 25% on profits over £250,000.
3. Wages, Benefits, and Pensions
- Minimum wage for over-21s rises to £12.21 per hour; rate for 18-20s moves to £10.
- State pensions increase by 4.1% in 2025 due to the triple lock.
- Carers’ allowance eligibility expands with the earnings threshold raised to £195 weekly.
4. Transport
- Freeze on fuel duty and 5p cut extended to April 2025.
- HS2 to extend to London’s Euston; Transpennine rail upgrade confirmed.
- Air Passenger Duty rises by £2 for short-haul flights and £12 for long-haul from 2026; private jet rates up 50%.
5. Alcohol, Tobacco, and Vaping
- Tobacco taxes increase by 2% above inflation; hand-rolling tobacco by 10%.
- New tax on vaping liquids from 2026 at £2.20 per 10ml.
- Alcohol tax rises on non-draught drinks but drops by 1.7% on draught drinks.
6. Government Spending and Public Services
- NHS and education spending increase by 4.7% this year.
- Defence budget rises by £2.9bn next year.
- Local councils receive £1.3bn extra, plus full retention of Right to Buy sales proceeds.
7. Housing
- Stamp duty surcharge on second homes rises from 3% to 5%.
- Stamp duty thresholds on primary homes revert to £125,000, with first-time buyer threshold lowering to £300,000.
- Social housing rent increases permitted above inflation; affordable housing budget boosted by £500m.
8. Economic Forecasts
- UK economy expected to grow by 1.1% this year, with inflation averaging 2.5%.
- Borrowing projected to rise by £19.6bn this year and £32.3bn annually over five years.
9. Other Measures
- £11.8bn allocated for infected blood scandal victims.
- Extra spending leads to additional funding for Scotland (£3.4bn), Wales (£1.7bn), and Northern Ireland (£1.5bn).
For a detailed analysis, please read our full 2024 Autumn Budget report here.
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