The Budget 2024 has been announced, but what does that mean for Small business Owners and Individuals - lets explore the key take aways from today :
Property Owners
Stamp Duty will increase immediately (from 31st October 2024) for anyone buying a second home /additional property :
Stamp Duty rates (England and Northern Ireland)
Purchase price | Main residence rate | Second or additional property - current rate | Second or additional property - rate from 31 Oct |
Up to £250,000(or £425,000 for first-time buyers) | 0% | 3% | 5% |
£250,001 – £925,000 | 5% | 8% | 10% |
£925,001 – £1,500,000 | 10% | 13% | 15% |
£1,500,001+ | 12% | 15% | 17% |
Capital gains tax rates on the sale of second properties will remain unchanged at 18% for basic rate tax payers and 24 % for higher rate tax payers
Sole Traders, Partnerships and Individuals
Tax thresholds will remain unchanged, meaning the standard personal allowance will stay at £12,570. This will stay frozen until 2028.
Income tax, National insurance rates will remain unchanged.
Capital gains taxes on the sale of assets will increase inline with Property CGT rates to 18% for basic rate tax payers and 24% for higher rate tax payers from April 25, this is an increase from 10%/18% currently.
National minimum wages will increase from April 25 onwards :
Age range | Current hourly rates | New hourly rates (from 1 April 2025) |
Apprentices | £6.40 | £7.55 (+17.9%) |
Under 18s | £6.40 | Awaiting confirmation |
Between 18-20 | £8.60 | £10 (+16.3%) |
Aged 21+ | £11.44 | £12.21 (+6.7%) |
Limited Company's and Employers
Employers National insurance will increase to 15% from April 25, this is an increase from the current rate of 13.8% and will come as an additional expense to business owners.
On top of this, Employers will start paying Employers NI on a workers earnings above £5,000. This is a big change, to the current threshold of £9,100 and does come as a blow to many small business owners.
The reality of this change is that many Sole Directors will now be hit with an additional National insurance bill, they did not previously have - We will do a separate blog especially for Tax efficiency for directors going into 25/26.
As covered under the individual section above, National Minimum wages will increase - which incur an additional expense/cost to employers. Please see the table above for the latest rates.
To compensate for the changes above, the Employers allowance will now increase to £10,500 from its current allowance of £5,000 from April 25. This the first £10,500 of an Employers PAYE bill will be covered by the allowance, before they pay HMRC.
VAT rates and thresholds remain unchanged.
Corporation tax rates to remain capped at 25% until the next election.
Business Asset Disposal relief - a tax when you sell part or all of your business, will increase from 10% to 14% from April 25. The Lifetime limited has remain unchanged.
Business rates relief for retail and hospitality businesses will fall from the current 75% down to 40% from 1st April 25. The 40% rates relief will be capped at £110,000 per business and will remain in place until 2026.
If you would like support on anything raised or to see how HPC Accountancy could support you and save you tax, get in touch today!
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