Autumn Budget 2024: What you need to know

The economy and fiscal forecasts

• The Budget will raise taxes by £40bn.
• The Office for Budget Responsibility (OBR) projects CPI inflation will average 2.5% this year, 2.6% in 2025, then 2.3% in 2026, 2.1% in 2027, 2.1% in 2028 and 2.0% in 2029.
• The cost of government borrowing will decrease, with the OBR forecasting that the government will spend less than it collects in tax by 2027. 
• The UK economy is forecast to grow by 1.1% in 2024, 2.0% in 2025, 1.8% in 2026, 1.5% in 2027, 1.5% in 2028, and 1.6% in 2029.

Taxes and duties

• The national minimum wage will rise in April 2025 to £12.21 per hour, moving towards a single national rate. For 18 to 20-year-olds, the minimum wage will rise from £8.60 to £10. Apprentices will receive an hourly increase from £6.40 to £7.55.
• Carer’s Allowance will increase to the equivalent of 16 hours at the National Living Wage per week. A carer can now earn over £10,000 a year and continue to receive the allowance.
• Spending on the state pension is projected to rise 4.1% in 2025-26, which amounts to an additional £470 per year.
• Employers National Insurance contributions will rise from 13.8% to 15%. In addition, the threshold at which businesses start paying national insurance on employee’s earnings will be reduced from £9,100 to £5,000.
• The Employment Allowance for smaller businesses will be increased from £5,000 to £10,500 per annum.
• The lower rate of Capital Gains Tax will increase from 10% to 18%, and the higher rate from 20% to 24%. The rates on residential property will remain unchanged.
• The Capital Gains Tax rates on carried interest will increase from 28% to 32% from April 2025.
• The Stamp Duty Land surcharge for second homes will increase by 2% to 5% from 31 October 2024.
• Enterprise Investment Scheme (EIS) to be kept until 2035.
• The current 75% discount to business rates (due to expire in April 2025) will be replaced by a discount of 40% up to a maximum discount of £110,000.
• The £1m lifetime allowance for business asset disposal relief will remain, with increased rates from 10% to 14% from April 2025, and 18% from April 2026 and onwards.
• The inheritance tax threshold of £325,000 will be frozen for a further two years to 2030 and will increase to £500,000 if the estate includes a residence which is passed to a direct descendant. In addition, inherited pensions will be brought into inheritance tax from April 2027. There will also be a reform to Agricultural Property Relief and Business Property Relief.
• Electric vehicle incentives will continue, with plans to increase the differential between fully electric and other vehicles in the first rates of Vehicle Excise Duty beginning in April 2025.
• The non-domiciled tax regime will be abolished from April 2025. In its place, a new residence-based scheme with "internationally competitive arrangements" for those coming to the UK on a temporary basis will be introduced.
• VAT on private school fees will be introduced from January 2025.
• Air passenger duty for private jets will be increased by 50%, while an increase of no more than £2 will be introduced for economy-class short-haul flights.
• A revised tobacco duty escalator will increase alongside RPI, plus 2%. Duties will also by increased by 10% on hand-rolled tobacco this year and a flat rate duty on vaping liquid from 2026.
• Alcohol duty rates on non-draught products will increase in line with RPI from February 2025.
• Fuel duty will also be frozen at its current level for a further year and maintain the existing £0.05 cut for another year, too.
• A Covid corruption commissioner has been appointed who will work with HMRC, the Serious Fraud Office and the NCA to examine an estimated £7.6bn worth of Covid-related fraud.
• There will be a more aggressive crackdown on tax avoidance, spotlighting promotors of such schemes.
• A “fair repayment rate” will be introduced for those on Universal Credit, which will reduce the level of debt repayments that can be taken from a household’s Universal Credit payment each month from 25% to 15% of their standard allowance.

Public sectors and government spending

• Defence spending in the UK is set to reach 2.5% of GDP. Defence budget to rise by £2.9bn from next year.
• Day-to-day public spending will see an increase of 1.5% next year.
• £500m increase for road maintenance to fix an additional one million potholes each year.
• The NHS will receive a £22bn boost to its day-to-day health budget, along with an additional £3.1bn for its capital budget.
• A £5bn investment will be made in housing, which includes £3.1bn for the Affordable Homes Programme.
• The Department for Education will receive £6.7bn in capital investment, including £1.4bn to rebuild over 500 schools.
• An extra £1bn will be allocated next year to extend the Household Support Fund.
• Reeves has confirmed the continuation of rail projects and funding for road improvements across the UK.

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