United Kingdom: Autumn Budget 2024

published on 31 October 2024 | reading time approx. 2 minutes

Boxed in by Labour’s manifesto pledges not to increase income tax, employee’s national insurance and VAT, Chancellor Rachel Reeves instead had to raid other taxes, like capital gains tax (CGT), inheritance tax (IHT), employer’s national insurance and to extend the tax threshold freeze to find the £40 billion needed to balance the books.

While the tax rises came thick and fast, the Chancellor announced there would no longer be biannual fiscal events. The Budget will now only be in the autumn, while the Spring Statement will have no tax changes.

Starting her speech with the economy, Reeves said the Government had “inherited a black hole in the public finances” and that public services were “on their knees”. Reeves said the tax-and-spend Budget was necessary to reverse the dire state of the public finances the Government inherited and to “fix the foundations to deliver change”.

As for the economic outlook, Reeves predicts real GDP growth of 1.1 per cent in 2024, 2 per cent in 2025, 1.8 per cent in 2026, 1.5 per cent in 2027, 1.5 per cent in 2028, and 1.6 per cent in 2029.

CPI inflation will average 2.5 per cent this year, 2.6 per cent in 2025, 2.3 per cent in 2026, 2.1 per cent in 2027, 2.1 per cent in 2028, and 2 per cent in 2029.

Quoting the Office for Budget Responsibility (OBR), she said: “This budget will permanently increase the supply capacity of the economy, boosting long-term growth.”

The Autumn Budget was somewhat of a mixed bag for businesses. On the one hand, the Chancellor made some significant moves to shore up the Government's finances – the largest hike in employer national insurance contributions in recent memory being a prime example. At the same time, the Budget also included some targeted support and relief for smaller firms. This notably included the expansion of the employment allowance, the NI discount available to eligible businesses.

A critical component of the Budget was the maintenance of corporation tax rates, with the main rate capped at 25 per cent for the duration of the Parliament.

Here’s a glance through the key measures that will affect individuals across the country: