Autumn 2024 Statement

Autumn 2024 Statement

In what has been the most highly anticipated Budget Statement for some time, the Chancellor has today set out her first Autumn Budget and what this will mean, in theory, to the pockets of business owners and their employees.

Our team of business lawyers will digest and review these proposed changes over the coming days but we have summarised briefly below some of the key changes.

• Capital Gains Tax

As expected by many, Capital Gains Tax rates will increase, with the lower rate of CGT rising from 10% to 18% and the higher CGT rate rising from 20% to 24% from today.

Business owners looking to sell shares in their business will face these higher rates although, Business Asset Disposal Relief (formerly Entrepreneur’s Relief) will remain in place. The relief will remain at 10% until April 2025 before being increased to 14%, and increased again to 18% in 2026.

Whilst the significant changes to the CGT regime come in to effect from today, the changes to Business Asset Disposal Relief will take effect next year. Business owners will have time to prepare for this. Those who are in the early stages of selling their business (or contemplating an exit in the next few years) should consult their advisers and get the right steps in place promptly.

• Employers’ National Insurance Contributions

Employers’ National insurance Contributions will increase to 15% (from 13.8%) and the threshold for when employers start paying NIC will be lowered from £9,100 down to £5,000.

(The Employment Allowance for smaller businesses will however, increase from £5,000 to £11,500, in the Chancellor’s attempt at helping small businesses)

Whether this has an impact on larger businesses and their headcount budgets for the next 12 months remains to be seen.

• Employee’s Personal Tax

As promised in the lead up to the election, Employee’s National Insurance and Income Tax rates will not be increased.

• National Living Wage

The Chancellor has confirmed that from April 2025 the National Living Wage will increase to £12.21 per hour (a 6.7% increase).

The National Living Wage applies to those aged 21 and over. The following wage rates will apply from April:

• National Living Wage = £12.21
• 18-20 Year Old = £10
• 16-17 Year Old = £7.55
• Apprentice Rate = £7.55