We are pleased to share with you a summary of today’s updates.
Income tax
Personal tax thresholds will increase in line with inflation from 2028/29 (frozen until then)
No change to income tax rates
Dividends
No changes to the rates of dividend tax, or the tax free amount, which stands at £500
National insurance
Employer’s National Insurance contributions will rise from 13.8% to 15% from April 2025
The threshold at which businesses start paying National Insurance on a worker’s earnings will be lowered from £9,100 to £5,000 from April 2025
The annual employment allowance will increase from £5,000 to £10,500 from April 2025
No change to employee rates of NI
Corporation tax
No changes to the rates of corporation tax
Capital Gains tax
From today, CGT will increase at the lower rate from 10% to 18% and the higher rate from 20% to 24%
The rate of CGT on residential property will stay at 18% and 24%
No change to the CGT annual exemption of £3,000
Inheritance tax
The threshold will be frozen at £325,000 until 2030
Inherited pensions will be brought into inheritance tax from April 2027
VAT
No change to the VAT threshold, which is currently £90,000
Housing
Stamp duty land surcharge for second homes will increase by 2% to 5% from 31 October 2024
Freehold holiday let regime to be abolished from April 2025
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Other
Existing incentives for electric vehicles will continue from 2028
Minimum wage to increase by 6.7% for people aged 21 or older – £12.21 an hour (previously £11.44 an hour) from April 2025
Minimum wage for people aged 18-20 to increase from £8.60 to £10 an hour
Apprenticeship pay to increase from £6.40 to £7.55 an hour
Business rates discount of 75% for retail and hospitality sectors, due to expire in April 2025, will be replaced by a discount of 40% (to a maximum of £110,000)
VAT on private school fees will come into effect from January 2025
Business rates relief on private schools will be removed from April 2025
Single fare bus cap will increase to £3 from £2 – this cap is in place until December 2025
Triple lock on pensions to be kept
State pension to increase by the highest of inflation, average earnings or 2.5%
Non domicile regime to be abolished
Fuel duty will be frozen for 2025, and the 5p cut will be extended for another year
Draught alcohol duty cut, and duty on non draught products increase in line with RPI from February 2025
