Autumn Budget 2024 Summary

Autumn Budget 2024: Key Tax Changes and What They Mean for You

On 30 October 2024, Chancellor Rachel Reeves presented her first budget to parliament. This was a budget intended to restore stability to our economy and to begin a decade of national renewal. Investment will be funded by revised debt rules to facilitate additional borrowing and a hefty £40 billion of tax rises.

Headlines included:

• Immediate increases to capital gains tax rates with further uplifts in relation to some business disposals from both April 2025 and April 2026.
• Immediate increases to Stamp Duty Land Tax, including for those buying residential property when they already own at least one dwelling.
• Confirmation that 20% VAT will apply to private school fees for the school term beginning in January 2025.
• Increased costs for many employers from April 2025 through both increases to the national minimum wage and significant reforms to employers’ national insurance contributions.
• Another change in approach for businesses utilising double-cab pick up vehicles, coming into effect in April 2025.
• Plans to restrict inheritance tax agricultural and business property reliefs from April 2026.
• Plans to include an individual’s undrawn pension fund in their inheritance tax estate from April 2027.

Below, we talk more about the Budget and what it means for you. 

INCOME TAX

Please note that ‘tax years’ run to 5 April each year and that, for example, 2025/26 signifies the year to 5 April 2026.

Your personal allowance

Your tax-free personal allowance will remain at £12,570 in 2025/26. The personal allowance is partially withdrawn if your income is over £100,000 and then fully withdrawn if your income is over £125,140. 

Income tax rates and allowances

For 2025/26, income tax rates and thresholds remain frozen at their 2024/25 levels. 

After your tax-free ‘personal allowance’ has been deducted, your remaining income will be taxed in bands in 2025/26 as follows:

2025/26		Income Type
		‘Other income’	Savings income	Dividend income
Basic rate	£1 – £37,700	20%	20%	8.75%
Higher rate	£37,701 – £125,140	40%	40%	33.75%
Additional rate	Over £125,140	45%	45%	39.35%

‘Other income’ means income other than from savings or dividends. This includes salaries, bonuses, profits made by a sole trader or a partner in a business, rental income, pension income and anything else that is not exempt.

Scottish taxpayers

If your main residence is in Scotland or you are otherwise classed as a ‘Scottish taxpayer’, the application of income tax rates and bands applies differently where ‘other income’ is concerned. After the ‘personal allowance’ has been deducted, your ‘other income’ is taxed in bands as follows:

Scottish Income Tax Rates for 2024/25
Tax Band	Income Range (£)	Tax Rate
Starter rate	£1 – £2,306	19%
Basic rate	£2,307 – £13,991	20%
Intermediate rate	£13,992 – £31,092	21%
Higher rate	£31,093 – £62,430	42%
Advanced rate	£62,431 – £125,140	45%
Top rate	Over £125,140	48%

The rates for 2025/26 are expected to be announced at the Scottish Budget, on 4 December 2024.

Welsh taxpayers

Similarly, you pay Welsh income tax if you live in Wales. The rates set by the Welsh government usually shadow the main UK income tax rates and allowances and this was the case for 2024/25. We expect the 2025/26 rates to be confirmed when the Welsh Budget is published on 10 December 2024.

Tax on savings income

A savings allowance determines how much savings income you can receive at 0% taxation, instead of the usual tax rates for savings income as shown above. This will remain at the 2024/25 level of £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. 

Interest income from an Individual Savings Account (ISA) continues to be exempt from tax. 

Tax on dividend income

A dividend allowance determines how much dividend income you can receive at 0% taxation, instead of the usual tax rates for dividend income as shown above. This will remain at the 2024/25 level of £500.

Dividend income from a ‘stocks and shares’ ISA continues to be exempt from tax.

Individual Savings Accounts (ISAs)

The limit on how much you can save into ISAs (including cash and stocks and shares ISAs) in 2025/26 remains at £20,000 overall. This includes up to £4,000 that can be saved into a Lifetime ISA. The Junior ISA and the Child Trust Fund limit both remain at £9,000. These ISA limits are now fixed until 2030.

Previous plans to introduce an additional ‘British ISA’ allowance will not be taken forward by the new government.

The High-Income Child Benefit charge (HICBC)

You may have to pay the HICBC if you are considered to have ‘high income’ and child benefit is being paid in relation to a child that lives with you, regardless of whether you are a parent of that child.  If you are living with another person in a marriage, civil-partnership or long-term relationship, you will only be liable to HICBC if you have the higher income of the two of you.

Since 2024/25 the child benefit ‘high-income’ threshold is £60,000. The HICBC is calculated at 1% of the child benefit received for every £200 of income above the threshold. This means that child benefit is only fully clawed back where income exceeds £80,000. 

The HICBC does not apply if the child benefit claimant opts out from receiving the payments.

The new government will not proceed with previous plans to explore a household income basis of calculating the HICBC.

CAPITAL GAINS TAX

As expected, and with immediate effect from the budget date of 30 October 2024, the rates of capital gains tax (CGT) have been increased on some asset types as follows: 

Capital Gains Tax Rates
Asset Type	Within Basic Rate Band	Outside Basic Rate Band
Assets other than residential property and qualifying business disposals	18%	24%
Residential property disposals	18%	24%
Qualifying business disposals	14%	–