Budget Summary 2024/25

Work in progress

The Autumn Budget 2024 was the first delivered by a Labour Chancellor since 2010, and the first ever delivered by a woman. Some things did not change: the objective of all Chancellors is to build a better Britain, to encourage growth, to support the NHS. The objectives Rachel Reeves laid out would not have seemed out of place in any of her predecessors’ speeches.

On a change of government, it is also normal to blame the previous administration for the lack of money. This was the Conservative line in 2010; in July, Labour announced that there was a huge undeclared ‘black hole’ in the public finances that would have to be filled. In the weeks leading up to the Budget, there was constant speculation about how Ms Reeves would raise the tax her rebuilding plans would require.

In the event, some of the fears proved unfounded – no changes to the tax-free lump sum from pension funds, no extension of the freeze on income tax bands beyond the already distant horizon of April 2028. But there were immediate rises in the rates of Capital Gains Tax, confirmation of the VAT charge on private school fees, and abolition of most of the tax advantages of being a ‘non-dom’.

The biggest tax increase by far was a substantial increase in Employers’ National Insurance Contributions: it was a relief that this will only apply from the beginning of the next tax year, after the complications of in-year changes that previous Budgets have imposed. It prompted a furious debate about whether this was, in fact, a ‘tax on working people’, contrary to Labour’s manifesto pledges.

There was, as always, a huge amount of information in the documents that are released on the internet the moment the Chancellor sits down. It is also possible to miss the impact of changes that were announced earlier and which are only now coming into effect. In this document we have summarised the latest proposals and their impact, and also included reminders of some of those earlier announcements. If you would like to discuss what it all means for you, we will be happy to help.

Significant points