The Chancellor Rachel Reeves delivered her first budget at the end of October. There has certainly been much reported by the media but what does it mean for you?
Capital Gains Tax (CGT)
One of the big tax changes was the increase in CGT. The lower rate has increased from 10% to 18% and the higher rate from 20% to 24%. These new rates apply for disposals made on or after 30 October 2024.
Business Asset Disposal Relief (BADR) will remain at 10% for this year but will increase to 14% for disposals made after 6 April 2025 and 18% for disposals made after 6 April 2026.
CGT rates for residential property are remaining at 18% and 24%.
Employers National Insurance
Employers national insurance contributions are going to increase from 13.8% to 15% from April 2025. In addition, the threshold at which employers start paying NI on an employee's salary will be reduced from £9,100 to £5,000 from April 2025. This change will make employing staff more costly, especially those businesses who employ part-time staff.
Employment Allowance
To help mitigate the increase in Employers National Insurance mentioned above, the employment allowance is being increased from £5,000 to £10,500. This can be claimed by all buisnesses (and charities) if employer's Class 1 NIC liabilities were less than £100,000 in the previous tax year.
Income Tax
The personal allowance (currently £12,570) will rise in line with inflation...but not until 2028/29.
There were a number of other announcements, including inheritance tax and agricultural property relief, that were also announced. Please get in touch if you would like to discuss these, or any of the above, in more detail.
Comments