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The Autumn Budget is announced by the Chancellor of the Exchequer in the House of Commons. It includes a review of the nation’s finances and economic situation as well as changes proposed by the government.
Here are some of the key announcements made by the new Chancellor Rachel Reeves in the Autumn Budget that may affect you:
From 6 April 2025, the rate of employer National Insurance contributions (NICs) will increase by 1.2 percentage points from 13.8% to 15% and the annual threshold at which employers start to pay NICs will reduce from £9,100 to £5,000.
The Chancellor said she would not increase employee NICs or income tax for working people.
In addition, there will be no extension of the freeze in income tax and employee National Insurance thresholds announced by the previous government, so from 2028/2029 the personal tax thresholds will go up in line with inflation.
The Employment Allowance will increase from £5,000 to £10,500, and the £100,000 threshold will be removed, meaning 865,000 employers won’t pay any NICs at all next year.
The national living wage for those aged 21 or older will rise from April 2025 by 6.7%, taking it from £11.44 an hour to £12.21. The national minimum wage will also go up for those aged between 18 and 20 from £8.60 an hour to £10.
Hourly pay for apprentices will increase from £6.40 to £7.55.
The freeze on the inheritance tax threshold will be extended for a further 2 years to 2030.
The Chancellor said the first £325,000 of any estate could be inherited tax free. This rises to £500,000 if the estate includes a residence passed to direct descendants and £1m when a tax-free allowance is passed to a surviving spouse or civil partner.
Inherited pensions will be brought into inheritance tax from April 2027.
There are increases in the rates at which capital gains tax (CGT) is paid on any profits made from the sale of assets such as second homes or shares.
The lower rate of CGT will go up from 10% to 18%, and the higher rate from 20% to 24%.
The increased rates take immediate effect from 30 October 2024.
The rates on residential property will remain at 18% and 24%.
There will be a 4.1% rise in the basic and new state pension in 2025/2026.
From April 2025, the full new state pension will increase from £221.20 to £230.25 a week and the full basic state pension will go up from £169.50 to £176.45 per week.
The existing non-UK domicile tax rules - for UK residents whose permanent home or domicile for tax purposes is outside the UK - will be abolished from April 2025.
The Chancellor announced a new scheme based on residence, which she said would have "internationally competitive arrangements" for those coming to the UK temporarily.
The stamp duty land tax (SDLT) surcharge for second homes, buy-to-let residential properties, and companies purchasing residential property will go up from 3% to 5% from 31 October 2024.
The government also confirmed that the sunsetting of the temporary residential rates of SDLT - introduced by the previous government in 2022 - will go ahead as planned on 31 March 2025. For transactions with an effective date on or after 1 April 2025:
Fuel duty will be frozen, with the existing 5p cut retained until 22 March 2026. The Chancellor said a fuel duty rise of 7p per litre was the wrong choice for working people.
Tobacco duty will rise by the Retail Price Index (RPI) measure of inflation as well as 2%. The Chancellor also said she would increase duty by 10% on hand-rolled tobacco this year, bring in a flat-rate duty on all vaping liquid from 2026, and a one-off increase in tobacco duty to encourage smokers to give up smoking.
The Chancellor said duty on draught alcohol would be cut - equivalent to a penny a pint - but rates on non-draught products would increase in line with RPI from February 2025.
The single bus fare cap which applies in many routes across England will go up from £2 to £3 and the scheme will be extended for a further year until December 2025.
The Chancellor confirmed that VAT would be brought in for private school fees from January 2025. The government will also legislate to remove their business rates relief from April 2025.
There will be an increase in the carer's allowance from £81.90 per week to the equivalent of 16 hours at the national living wage rate.
The Chancellor says this means a carer will be able to earn more than £10,000 a year while receiving the allowance.
There will be an increase in air passenger duty from 2026/2027, which the Chancellor says will be no more than £2 for an economy-class short haul flight.
But she also announced a further 50% rise in the rate of air passenger duty for private jets, equivalent to £450 per passenger.
Many people are eligible for government support but don’t realise it. You may think you need to be out of work to claim anything – but that’s not the case.
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The information in this article was last updated on Thursday 31 October 2024.
