Chancellor Rachel Reeves delivered the Autumn Budget 2024, the first under the Labour government, with key changes to National Insurance, Capital Gains, and various consumer prices. The minimum wage is set to increase by 6.7% to £12.21 per hour, benefiting workers with an extra £1,400 a year. Carers will now be able to earn more without losing their carer’s allowance, allowing them to earn over £10,000 annually while receiving the benefit. Additionally, state pensions will rise by 4.1% next year to £230.30 per week, but there are concerns about income thresholds being frozen.
On the positive side, the government has cut draught beer duty by a penny, resulting in potential savings for pub-goers. Fuel duty has been frozen, continuing with a 5p-per-litre cut introduced in 2022. However, the freeze means the government will miss out on £3 billion in tax revenues. On the other hand, families dealing with inheritance will face challenges, as inheritance tax will now apply to inherited pension pots, and relief on inheritance of agricultural land and family businesses will be capped.
Employers will see an increase in national insurance contributions by 1.2 percentage points from April, with the secondary threshold being reduced from £9,100 to £5,000. This change aims to raise £25 billion per year by the end of the forecast period. Investors will also face a tax hike, with the lower rate of Capital Gains Tax rising from 10% to 18%, and the higher rate climbing from 20% to 24%. Landlords purchasing second homes will face a higher stamp duty land tax surcharge of 5%.
Smokers and vapers will also be affected, as the tax on hand-rolling tobacco will increase by 10%, and a flat rate levy will be imposed on all vaping liquids starting October 2026. The government is also abolishing the non-dom tax regime from April, aiming to raise funds for public services. Chancellor Reeves emphasized the importance of paying taxes in Britain for those who make the country their home. Despite some positive changes, there have been some controversies and opposition to certain Budget 2024 decisions.
