Autumn Budget 2024

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Chancellor Rachel Reeves delivered her Budget on Wednesday 30 October 2024. She pledged to ‘invest, invest, invest’ to drive growth and ‘restore economic stability’

Some of the key highlights include:

  • The basic rate band is frozen at £37,700 until April 2028. The NICs Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate threshold at £50,270 for these tax years as well.
  • For 2025/26 the point at which individuals pay the additional rate of 45% is £125,140.
  • The Income Tax personal allowance is fixed at the current level of £12,570 until April 2028. The government has suggested that, from April 2028, it will then be uprated in line with inflation.
  • There is a reduction in the personal allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. This means that there is no personal allowance where adjusted net income exceeds £125,140.
  • Currently, the first £500 of dividends is chargeable to tax at 0% (the Dividend Allowance). This £500 is retained for 2025/26.
  • Dividends received above the allowance are taxed at the following rates for 2025/26:
    • 8.75% for basic rate taxpayers
    • 33.75% for higher rate taxpayers
    • 39.35% for additional rate taxpayers
  • The government announced that it will increase the employer rate from 13.8% to 15% from 6 April 2025.
  • The government has announced increased rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from1 April 2025. The rates which will apply are as follows:
    NLW: £12.21
    18-20: £10.00
    16-17: £7.55
    Apprentices: £7.55
  • The government has confirmed that the rates of Corporation Tax will remain unchanged, which means that, from April 2025, the rate will stay at 25% for companies with profits over £250,000. The 19% small profits rate will be payable by companies with profits of £50,000 or less. Companies with profits between £50,001 and £250,000 will pay tax at the main
    rate reduced by a marginal relief, providing a gradual increase in the effective Corporation Tax rate.

For more information please follow the link below:

 

https://files.mercia-group.com/BBOCT24PDF/Wettone_Matthews_(W-2512256)_BS_Oct24.pdf