Top 10 Autumn Budget Insights for Business Owners

From 6 April 2025 there are increases to both the National Living Wage and National Minimum Wage as detailed below; 

• National Living Wage increases from £11.44 to £12.21 per hour
• National Minimum Wage (for 18 to 20 year olds) increases from £8.60 to £10 per hour

ACTION POINT  Review contractual agreements and employment contracts where rates of pay may be subject to National Living Wage/National Minimum Wage thresholds. 

The High-Income Child Benefit Charge (HICBC) limit was increased from £50,000 to £60,000 from 6 April 2024. At income levels of £80,000 the full amount of child benefit would need to be paid back in full. The HICBC is based on the higher earner in the household. The previous government proposed that in the future it would be the household income that would be taken into account when determining the charge, but that is no longer the case. The Chancellor announced that the charge will remain with the higher earner in the household.  

ACTION POINT  For those who operate via companies, consider remuneration planning to ensure that level, type and timing of income is correct and dealt with efficiently.  

• Annual exempt allowance remains unchanged at £3,000
• For disposals on or after 30th October 2024 the lower rate has increased from 10% to 18% with the higher rate rising from 18% to 24%.
• There are no changes to the residential rates of CGT which remain at 18% and 24%

ACTION POINT  Undertake a CGT review to establish  
a) how the increase in CGT rates may impact you,  
b) whether assets could be disposed of to release losses and  
c) if there is scope to transfer certain assets to spouses to minimise exposure to the 24% rate. 

This is a relief that fixes a lower rate of tax on gains arising from the disposal of business assets, and is available on the first £1 million of those gains, subject to certain conditions. 

• The rate will remain at 10% until 6 April 2025, when it increases to 14%.
• A further increase to 18% will happen on the 6 April 2026

ACTION POINT  If a sale of the business is underway or being considered, aim to have this completed prior to 6 April 2025 to lock in the 10% CGT rate on the first £1 million. 

From 6 April 2027 unused pension funds (including death benefits payable from a pension) will be brought into a person's estate for inheritance tax purposes. This is a major change to existing legislation where pensions have not formed part of a deceased person’s estate for inheritance tax.  
 
ACTION POINT  Review pension provisions with your financial advisor and consider other options for future retirement provision.  

• Relief of up to 100% is currently available on qualifying business assets.  

• From 6 April 2026 the 100% rate of relief will continue for the first £1 million, in addition to the existing nil rate bands and exemptions, it will be 50% thereafter.  

 ACTION POINT The £1 million threshold can not be transferred between spouses, however this maybe revised in the future. Until then, careful asset management may help reduce future IHT costs.

• The applicable percentage for zero emission and electric vehicles (EV’s) will raise by 1 percentage point until the 2028/29 tax year when it will rise to 7% and to 9% in the 2029/2030 year.  
• Car with emissions of 1 to 50g will rise to 18% in 2028/29 and 19% in 2029/30
• For all other vehicle bands there will be a 1 percentage point rise in the tax years 2028/29 and 2029/30. This will be to a maximum of 38% in 2028/29 and 39% in 2029/30.
• From 6 April 2026 the reporting of all benefits is to be mandated through payroll software. There will be further information released on this change in due course
• From April 2025, double cab pick-up trucks are no longer to be treated as commercial vehicles i.e. vans, and their tax treatment will result in reduced capital allowances and increased benefits in kind.  Transitional BIK arrangements will apply for employers that have purchased, leased, or ordered a double cab pick-up truck before 6 April 2025, which will run until disposal, lease expiry or a fixed date of 5 April 2029, whichever is sooner.

ACTION POINT  Review your P11D policies to ensure compliance with the new online regime when full details are released.  Consider the future increases in BIK levels, especially on EVs, for future leasing/purchase agreements, and tie ins to longer contracts.  In the case of double cab pick-ups, consider other types of staff vehicles that may be suitable and still meet the van definition, or look at pool car provisions.  

Scotland:
While this measure does not impact second home purchases in Scotland as a result of the Scottish government determining these rates where it is classed as Land and Buildings Transaction Tax (LBTT) there is a high possibility that the Scottish government could introduce the following changes in the Scottish Budget which is scheduled for 4 December 2024. 

England and NI:
SDLT is being increased from 3 to 5 percentage points above the standard residential rates for additional properties purchased by individuals and property purchased by companies.  Be aware further changes reducing stamp duty thresholds will come into effect from 1st April 2025.

ACTION POINT  If in Scotland, monitor the Scottish Budget to establish if/when any increase arises for LBTT, and potentially review property ownership strategies.  In England and NI, review your property ownership strategies and get advice.

From 6 April 2025 the late payment interest charge by HMRC on unpaid tax liabilities will increase by 1.5%. This is currently set at 7.5% (Bank of England base rate of 5% plus 2.5%) and will increase to 9% (5% plus 4%). At the time of writing the reduction of the base rate to 4.75% that was announced on the 7th Nov hasn’t been reflected by HMRC. 

ACTION POINT  Use cash flow projections to plan ahead and make provision for payment of all tax liabilities to be paid on time, to reduce interest costs.  Consider the commerciality of borrowing to finance liabilities if significant.