Here are the key points from the Government's budget delivered on 30th October 2024 that effect business owners and property investors.
Another budget and another chancellor and this time it's Rachel Reeves to have her turn to stand up at the despatch box, to deliver the Budget. This comes on the backdrop of her announcing the £22bn black hole in the public finances. With the aim of fixing the foundations here are the key changes. These tax changes will bring in £9bn for the government.
Stamp Duty
For 2nd homes this will increase by 2%, which will come into effect tomorrow. This means an additional 5% for each tax band. Although this will hurt buy-to-let investors, it will encourage 1st time buyers.
Business Rates
There will be a 40% relief for retail, leasure and hospitality. The small business tax multiplier will be frozen.
The Economy
CPI inflation rate is forcasted to be 2.5% this year and then fall to 2% by 2029. Real GDP is set to grow between 1% and 2% each year up to 2029. The government will not borrow to meet day to day spending, which will be financed by tax receipts.
Inheritance Tax
The £325k allowance will be frozen until 2030.
Inherited pensions will come into your estate for IHT from 2027.
Corporation Tax
This will be capped at 25%.
Non-Dom Tax Regime
This will be abolished from April 2025. A new residence based scheme will be introduced.
Pay, Income Tax and National Insurance
The Income Tax and National Insurance will not be changed. The tax-free thresholds will uprated from 2028/29 onwards.
Employers National Insurance will increase to 15% from April 2025. The secondary threshold will reduce to £5,000. This is the point from which employers will start paying national insurance.
The employment allowance is increased to £10,500 to help small business owners. This will be a huge relief for small businesses.
From April 2025 The national living wage will be increased to £12.21 per hour. The national minimum wage to increase for 18-20 year olds to £10.00 per hour.
Capital Gains Tax
The lower rate to increase from 10% to 18% and the higher rate to increase from 20% to 24%. The lifetime limit on Business Asset Disposal Relief will remain at 10% this year, raising to 14% in 25/26 and 18% in 26/27.
CGT on residential property will be maintained at 18% and 24%.
VCT and EIS schemes will be extended to 2030.
Fuel Duty
This will be frozen, meaning there are no higher taxes for filling up your vehicle.
Other Measures
They will improve HMRC systems. They will increase interest rate on tax debt and will go after umbrella schemes that are exploiting workers.
Carers allowance will be increased to 16 hours at the national living wage per week. This will mean a carer can earn up to £10,000 as a job whilst being a carer.
Draft duty is being cut by 1.7%, which means a penny off the pint in the pub.
VAT on private school fee's will be introduced from January 2025.
There will be an increase in the air passenger duty by 50% for private jets.
If you would like to know more about how this effects your business, please contact your team member directly or email enquiries@Charterwells.co.uk.
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