Following Rachel Reeves’ budget earlier today we have summarised below the key tax changes and announcements she has made:

• Increase to employers NIC to 15% from April 2025 and also reduce threshold at which paid from £9,100 to £5,000.
• Increasing employment allowance from £5,000 to £10,500.
• No extension to freezing of tax and national insurance allowances.
• National Living Wage changes announced from April 2025. Adult rate £12.21, 18-20 year olds £10, Apprentice rate £7.55 an hour and single rate to be phased in.
• Confirm for next five years of cap to corporation tax at 25% plus full expensing and £1m investment allowance plus R&D.
• Capital Gains Tax – increase in lower rate from 10% to 18% and higher rate from 20% to 24% (residential property rates unchanged).
• Business Asset Disposal Relief limit remains at £1m but rate to increase from 10% to 14% (April 2025) then 18% (April 2026).
• CGT rate for carried interest to be 32%.
• Inheritance Tax – thresholds frozen until 2030.
• Pension pots to be taxed as part of estates from 2027.
• Inheritance Tax – Agricultural Property Relief /Business Property Relief reform – 100% relief for first £1m, then 50% relief above that.
• Business Rates two permanently lower tax rates for hospitality and leisure from 2026/27.
• 40% Business Rates relief for retail, hospitality and leisure up to £10k per business.
• Reduction to draught duty of 1p per pint for pubs.
• Non-dom regime abolished and from April 2025 domicile will be abolished as part of tax system.
• Stamp duty for second homes to increase from 3% to 5% from TOMORROW.
• VAT on school fees from January 2025 and remove their business rates relief.
• Mandatory payrolling of Benefits in Kind from April 2026.
• Fuel duty to remain frozen for a further year.
• Increase to rate of interest charged on overdue tax.

Our full detailed guide on the Budget and our Tax Tables will be on our website from tomorrow so please check back or keep an eye on our social media channels.

Sign up for future updates from Simpson Wood via email by clicking here