Tax experts at leading UK accountancy and business advisory firm Johnston Carmichael have shared their views on the 2024 Autumn Budget, the first to be delivered by a Labour Government in 14 years and the first by a female Chancellor.

Commenting on behalf of the firm, David Ward, partner and Head of Specialist Taxes, Johnston Carmichael said:

“The Chancellor delivered a Budget that will raise taxes by £40bn with more than half coming from employers.

“After weeks of speculation, she confirmed that National Insurance contributions for employers would rise by 1.2%, raising £25bn. While the percentage increase is not as great as had been predicted, in combination with the reduction in the threshold at which employers pay National Insurance contributions from £9,100 to £5,000, this will significantly increase costs for businesses.  The Chancellor was clear that working people would not see tax rises in their payslip, but this is clearly a tax on jobs.

“As expected, there were some changes to inheritance tax (IHT). Qualifying businesses could previously be passed onto the next generation after death or gifted within an owner’s lifetime and secure up to 100% IHT relief. From April 2026, those with a value of up to £1m will continue to qualify for 100% relief but after that a 50% rate will apply. Business owners should manage their succession planning much earlier in order to mitigate their IHT bill.

“In another significant change, from April 2027 pensions will be counted as part of an estate and could be subject to inheritance tax of up to 40%. This could impact succession planning.

“Following noise about an increase to capital gains tax (CGT), the Chancellor confirmed that the maximum rate of CGT would rise from 20% to 24% for most assets. This applies to disposals from today. Residential property rates will remain at 24%.

“The lifetime limit for Business Asset Disposal Relief will remain at £1 million to encourage entrepreneurship but will increase from 10% to 14% in April 2025 then 18% in April 2026.  Business owners should consider carefully their plans if they are hoping to sell.

“The budget includes a corporation tax roadmap, committing to the current headline corporation tax rate of 25%, maintaining full expensing and annual investment allowance for capital expenditure and retaining the beneficial R&D regime, providing a degree of certainty for businesses.”

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