Here was our live feed summary of the tax and economic highlights of the Chancellor's Autumn Budget speech.
Our full coverage is now located in our Autumn Budget 2024 Zone.
This was the first budget to be delivered by a woman, Chancellor Rachel Reeves and the first Labour budget for 14 years.
See Autumn Budget 2024: At a glance for our summary of the key announcements
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Ms Reeves said she aimed to put pounds in people's pockets, an NHS that is there when you need it and a growing economy. She added that she would invest to drive economic growth and restore economic stability.
Public finances: Ms Reevs said that she had uncovered a £22bn black hole in the finances, a fact refuted by the opposition leader, Rishi Sunak in his parliamentary reply.
- The government is to publish a line-by-line breakdown of the black hole.
- The Office of Budget Responsibility (OBR) confirmed that the previous government did not provide all the information that it needed for a full analysis.
- Had the OBR known the full facts the March, its forecast would have been materially different.
- She promised that never again would a government be allowed to hide the true state of financial circumstances.
- Will implement the 10 recommendations of the OBR's budget review.
Since 2021, the last government made no detailed plans for departmental spending and there was a failure to budget for the costs of compensation schemes: the infected blood scandal and Post Office compensation schemes.
The Government will provide £11.8bn for compensation to victims of infected blood. A £1.8bn provision for victims of the Post Office scandal.
This budget raises taxes by £40bn.
Inflation is to average 2.5% this year OBR forecasts 2% inflation by 2029.
There will be a new charter for Budget responsibility.
Ms Reeves forecast growth of:
- 1.1% in 2025.
- 2% in 2026.
- 1.8% in 2027.
- 1.5% in 2028.
- 1.6% in 2029.
There would be a focus on restoring stability and investing via a growth fund to get Britain building again and developing plans with local mayors.
Aim to bring current budget into surplus by 2027 by then balancing every third year.
Government borrowing is now £127bn, reducing to £70.6bn by 2029/30.
Setting a 2% cross-department savings budget. There will be increased fraud investigations of the abuse of COVID schemes. A new office for value for money for public sector spending.
A crack down in fraud in wellfare systems by DWP including direct access to bank accounts to recover debt.
Tax
There will be increased investment to modernise HMRC systems and recruit additional HMRC staff, with a particular emphasis on compliance and investigation.
There will be a further crack-down on umbrella companies and a rise in the interest rate on tax debts.
NLW and pensions
- National Living Wage (NLW). The government will accept the Low Pay Commission's recommendation of a NLW of £12.21 per hour and an increase to the National Minimum Wage of £10 per hour for 16-18-year-olds.
- Carers Allowance will see earnings relief increase up to £10,000 per year.
- Plans to make work pay will include protection from unfair dismissal.
- The state pension is projected to rise 4.1% in 2025-26, a £470 increase.
- Pension credit to rise to around £11850 per year.
Full duty will be frozen and the five-pence cut will retained until 2025.
National Insurance Contributions (NICs)
The cuts made by the last goverment were based on an inaccurate OBR forecast. However the Chancellor maintained her commitment to not increase NICs, VAT or Income Tax for working people.
Revenue raising measures
- Increase in Employers' NICs by 1.2% to 15% from 2025.
- Reduce Employers' Secondary threshold to £5,000 (from £9,100).
- This should raise £25bn.
- An increase in the Employment Allowance to £10,500. This allows the employment of four workers at NMW levels.
Capital Gains Tax (CGT)
- Change basic rates, they rise from 10% to 18% from 2025.
- Higher rates rise from 20% to 24%.
- Residential property rates see no change at 18% and 24%.
- A maintaining of the lifetime limit for BADR at 10%, rising to 18% by 2027.
Enterprise Investment schemes
- EIS and VCT schemes (as already announced) are extended to 2035.
Inheritance Tax (IHT)
- Only 6% of estates will pay IHT this year.
- Nil rate threholds extended until 2030.
- Inherited pensions subject to IHT from 2027.
- From April 2026 the first £1m is IHT-free, assets over £1m have a 50% relief, making a net 20% IHT rate.
- 50% relief for shares on the AIM or other alternative markets.
Duties
- Increase to Vape liquor tobacco and a soft drinks levy.
- Electric vehicle incentives to be maintained.
- An increase of tobacco tax.
- VED to increase .
- A cut of 1.7% on duty for draught beers.
Business Rates
- A higher multiplier for expensive properties.
- 40% relief for retail, hospitality and leisure businesses from 2026.
- Small business multipler frozen.
- The 75% discount to business rates, will be replaced by a discount of 40% in 2025, subject to to a maximum discount of £110k.
Corporation Tax (CT)
- Corporation Tax Road Map.
- Capping the CT rate at 25%.
- Maintain full expensing and AIA.
Non-dom tax regime and domicile confirmed as removed from 2025
- An introduction of a residence-based scheme.
- Extend temporary repatriation relief.
Fund management
- Carried interest tax increases from 28% to 32% from April 2025.
- More specific reforms from 2026.
Stamp Duty Land Tax
- Higher rates on additional (second homes) dwellings increases by 5% from 31 October 2024.
Corporate
- An increase of the energy profits levy to 38% from 2030.
- Removing the £29% investment allowance but maintaining other tax incentives.
Education
- Apply VAT on private school fees from 2025 and also remove their business rates relief.
- Trippling investment in breakfast clubs.
- A £2.3bn to core budgets for teacher hire in core subjects.
- £300m funding for higher education.
- Reforming special educational needs provision.
Role of public investment
- Portfolio of new government investments will be professionally managed to match the return on gilts.
- £2.9 bn extra for the Ministry of Defence.
- Capitalise the new national growth fund.
- Multi-year funding for different sectors:
- Aerospace £1bn.
- Automotive sector £2bn.
- Life science manufacturing £520m.
- Biotech, manufacturing, medicine over £6bn.
- Creative Industries will get increased tax relief for TV and film effects.
Housing and social housing
- Commitment to build 1.5 million homes and £5bn of investment.
- £3.1bn for affordable homes.
- £3bn to support small house builders.
- Reduction in right-to-buy discounts.
- All money from the sale of council houses to remain with the local council.
An array of measures to upgrade rails and roads
- Funding for Transpennine rail and electrification.
- East-West rails.
Making Britain a clean energy superpower
- Increased investment in Carbon Capture Systems (CCS).
- New funding for 11 green hydrogen projects of a commercial scale.
- £3.4m for a warm home scheme.
- Establish GB Energy in Aberdeen.
£100bn investment in capital funding to drive growth
Two final areas where investment is needed:
- £6.7bn for capital investment to the Education Department.
- School rebuilding project and dealing with RAAC-affected schools.
- NHS: a ten-year plan to deliver productivity growth.
- £22.1bn for healthcare day-to-day spending.
- £3.1bn for NHS capital expenditure.
End
Motions all passed by the house following the speech
- VAT private scheme
- SDLT Additional rate dwelling
- SDLT purchases by companies
- Rates of tobacco duty
2025-26 Income Tax charged
As noted, this is a summary of live highlights. please visit our Autum Budget 2024 Zone for our move detailed coverage of the budget documents once they have been published.
