By Nick Darking, BAGMA General Manager

The new Labour Government has made big changes in their first budget, delivered on the 30th October. With the largest tax rises for over 30 years, the UK’s tax burden is set to reach a record high as a share of GDP (outside wartime) of over 38%. By European standards, this is still relatively low and is comparable with the economic challenges seen in other countries given the increasing pressure on public services, not least because of global ageing populations.

Businesses are set to bare the brunt of the Chancellor’s tax rises, with the headline grabbing increase in the National Insurance rate for employers just one of a number of announcements set to impact firms and workers.  While it is impossible to outline everything here, BAGMA have picked out some of the important changes that may affect you and your business.

  • An increase in the rate of employer National Insurance contributions (Secondary Class 1 NIC’s) from 13.8% to 15% from April 2025. The threshold at which employers become liable to pay will also be cut from £9,100 to £5,000.
  • The Employment Allowance relief on NIC’s will be increased from £5,000 to £10,500 and extended to all employers, not just those with NIC bills of £100,000 or less, from April 2025.
  • Increases in the National Living Wage will to £12.21 per hour, the National Minimum Wage for 18-20 year olds to £10 per hour and apprentices/under 18’s to £7.55 per hour.
  • 100% Business Property Relief from Inheritance Tax will be limited to the first £1million of qualifying property. 50% relief above that level, with IHT payable at 20%.
  • Resurrection of the proposal to treat double cab pick-ups with a payload of one tonne or more as cars for certain tax purposes. Previously dropped following backlash from farmers and others, this proposal would apply to both corporation and income tax for the purposes of capital allowances, benefits in kind and some deductions from business profits.
  • Company Car Tax rates to increase from 2028, which will vary depending on the type of vehicle and will remain much lower for zero emission and electric vehicles.
  • Increases to the first-year rate of Vehicle Excise Duty for all ICE vehicles, including hybrids.
  • Publication of a ‘Corporate Tax Roadmap’, setting out the government’s plans on Corporation Tax, including commitments to key features of the system and the capping of the rate at 25%.
  • Increases to the main rates of Capital Gains Tax to 18% (lower rate) and 24% (higher rate) for disposals made after 30th October 2024.
  • A freeze in fuel duty and extension of the ‘temporary’ 5p cut in duty until 22nd March 2026.
  • Statutory ‘Fuel Finder’ scheme to launch in 2025 (subject to legislation), requiring all filling stations to report price changes or unavailability of fuel within half an hour.
  • £4 billion pilot package to encourage technology adoption by SMEs.
  • A number of measures to crack down on tax avoidance from April 2026, including ending “contrived car ownership schemes” used to avoid company car tax.
  • Abolition of ‘non-dom’ tax status, to be replaced by a residence-based regime from April 2025.
  • Launch of a new ‘Office for Value for Money’, to scrutinise departmental spending, reduce waste and ensure value for money.
  • Increased investment in compliance staff and modernising of IT systems at HMRC to improve the collection of tax.
  • Confirming plans to mandate the reporting of benefits in kind via payroll software from April 2026, for both income tax and employer NI contributions.
  • Increase in late payment interest rates on unpaid tax liabilities by 1.5 percentage points from April 2025.

If you have any questions on anything listed above, please do get in touch – BAGMA and our service partners are here to help. Otherwise, the autumn budget can be viewed in full by clicking this link: https://www.gov.uk/government/publications/autumn-budget-2024,