Key points from the October 2024 budget

Corporation Tax

• The headline rate of Corporation Tax remains at 25%.
• Full expensing for capital expenditure on plant and machinery continues, along with the £1 million Annual Investment Allowance (AIA).

Capital Allowances

• The existing full expensing measures are maintained, providing a 100% first-year allowance for qualifying plant and machinery.
• The £1 million Annual Investment Allowance (AIA) remains in place.

Transfer Pricing

• The government plans to consult on potential reforms to the UK’s transfer pricing rules, including the possible removal of UK-to-UK transfer pricing.

National Minimum Wage Rates

• From April 2025, the national minimum wage for workers aged 21 and over will rise to £12.21 per hour.
• For those aged 18 to 20, the rate will increase to £10 per hour.

Employer NIC

• Employer National Insurance Contributions (NIC) will increase from 13.8% to 15% starting April 2025
• The threshold for employer NIC will be reduced from £9,100 to £5,000 per year.

Audio Visual Expenditure Credit

• Film and high-end TV productions can claim an enhanced 39% rate of Audio-Visual Expenditure Credit (AVEC) from January 2025.

Personal Income Tax

• No increases in income tax rates for working people.
• The remittance basis of taxation for non-UK domiciled individuals will be abolished from April 2025.

Benefit in Kind

• No other specific changes announced for benefit in kind (BIK) in this budget apart from the rates for Electric Vehicles (EVs).
  The BIK rate for electric company cars will increase from 2% to 3% starting April 2025.

Domicile Tax

• The concept of domicile status will be removed from the tax system, replaced by a residence-based regime from April 2025.

Capital Taxes

• Capital Gains Tax (CGT) rates will increase to 18% for the lower rate and 24% for the higher rate from October 2024.

Inheritance Tax (IHT)

• The IHT nil-rate band and residence nil-rate band threshold freezes are extended to April 2030.

VAT and Indirect Taxes

• No significant changes to VAT rates were announced

Business Rates

1. Permanent Discount:
   The current 75% discount on business rates, which is set to expire in April 2025, will be replaced by a permanent 40% discount. This discount will be capped at £110,000 per business.
2. Higher Multiplier for Valuable Properties:
   To fund the permanent discount, a higher multiplier will be applied to the most valuable properties.
3. Small Business Tax Multiplier:
   The small business tax multiplier will be frozen for the next year

Stamp Duty Land Tax (SDLT)

• Higher Rates for Additional Dwellings:
  The higher rates for additional dwellings, such as second homes and investment properties, will increase from 3% to 5% starting October 31, 2024.

• Flat Rate for Non-Natural Persons:
  The flat rate of SDLT for purchases by non-natural persons (e.g., companies, collective investment schemes) of single dwellings over £500,000 will rise from 15% to 17%.

• Temporary SDLT Thresholds:
  The temporary 0% SDLT threshold for residential property purchases will revert from £250,000 to £125,000 on April 1, 2025.
  The nil-rate threshold for first-time buyers will drop from £425,000 to £300,000, and the maximum house price for first-time buyer relief will decrease from £625,000 to £500,000.