The UK Autumn Budget 2024, set to be delivered on 30th October and is expected to introduce several significant tax and policy changes. This will be the first budget under the new Labour government, focusing on closing a £22 billion gap in public finances.
Key measures likely to be announced include:
- Tax Reforms: No increase in income tax, National Insurance Contributions, or VAT for working people, but significant changes in other areas such as inheritance tax and capital gains tax. There is also a plan to tighten the non-domiciled tax regime from April 2025, replacing it with a new residence-based regime.
- Private School Fees: From January 2025, private school fees will be subject to VAT at 20%, along with the removal of charitable rates relief for these schools in England by April 2025.
- Energy Profits Levy: The energy profits levy on energy companies will increase to 38%, applying from November 2024, as part of the government’s strategy to raise revenue.
- Furnished Holiday Lets: The abolition of the Furnished Holiday Letting (FHL) regime in April 2025 will have significant implications for property investors. This change could reduce the profitability of short-term rental properties, affecting business owners or employees who invest in such ventures
- Multinational Corporations: multinationals should prepare for more complex tax reporting requirements and potentially higher costs associated with compliance.
- Inheritance Tax: For investors and businesses with large estates or family-owned ventures, inheritance tax (IHT) changes are anticipated. Agricultural property relief and business property relief may see tighter rules, meaning future estate planning strategies will need to adapt
For businesses with international talent or those offering relocation packages, the budget brings a significant shift in how non-domiciled individuals will be taxed:
- The non-dom tax regime will be abolished from April 2025. Non-domiciled individuals will now be subject to a residence-based tax system, reducing tax advantages for expats.
- Companies relying on global talent will need to reassess the financial incentives and benefits they offer to attract and retain international staff, ensuring that compensation packages remain competitive under the new tax regime.
Additionally, the government plans to increase HMRC’s tax recovery efforts, aiming to hire 5,000 more staff to tackle tax avoidance and improve efficiency.
These measures are part of Labour’s broader approach to reforming the tax system, while keeping promises to avoid raising taxes on working individuals.
Now is the time to review your financial strategies, particularly around taxation, workforce planning, and investment structures, to ensure your business remains agile and compliant under the new rules.
