The rates of capital gains tax (CGT) payable on gains arising from assets other than residential property have been increased with immediate effect

Those taxpayers who decided to accelerate planned investment disposals before the Budget in anticipation of the predicted CGT hike will be pleased with their decision. From 30 October 2024 CGT is payable on profits from selling assets such as shares and commercial property at 18% (up from 10%) for gains falling into the taxpayer’s basic rate band and 24% (up from 20%) at the higher or additional rate.

This brings the rates in line with CGT on residential property disposals, which will remain at 18% for basic rate and 24% for higher rate taxpayers.

The CGT rate applied to a transaction will be the rate prevailing at the date of exchange. Where a contract is unconditional, this will be the date on which the contract is signed.

Business asset disposal relief (BADR) offers a reduced CGT rate of 10% for qualifying business disposals, subject to a lifetime maximum of £1m. The lifetime limit will be maintained, however the rates applying to BADR will gradually creep up from 10% to 14% on 6 April 2025 and to 18% on 6 April 2026.

Reliefs

For assets that qualify for investors’ relief, the lifetime limit is reduced from £10m to £1m from 30 October 2024 and the rate will increase from 10% to 14% on 6 April 2025.

The Chancellor has announced that the main rate of secondary Class 1 national insurance contributions (NIC) for employers will increase by 1.2 percentage points from 13.8% to 15% from April 2025.

The Class 1A and Class 1B employer rates (relating to benefits) will also increase in line with this.

As well as the rate increase, the earnings threshold above which employer’s national insurance is payable on an individual’s earnings will be slashed from £9,100 to £5,000 per annum. This means that an extra £4,100 per employee will be subject to employer’s NIC at 15%.

To soften the blow the employment allowance, which allows companies to reduce their national insurance liability, will be increased from £5,000 to £10,500. Currently the employment allowance is only available to businesses whose total secondary Class 1 NIC liability is less than £100,000. This limit will be removed from April 2025.

Some smaller businesses may find that their employer’s NIC burden is reduced overall following these changes.

There are certain circumstances where the employment allowance is restricted, for example where a company consists of only one single director and no other employees.

Where two or more companies are connected, the employment allowance is only available for one of the companies in the group. Companies are connected if:

• one company controls another; or
• both companies are controlled by the same person or group of people.

Contact us if you are unsure whether the employment allowance is available to your business.

In October 2024, Chancellor Rachel Reeves presented the UK’s Autumn Budget, introducing significant fiscal measures aimed at addressing economic challenges and funding public services. Key components of the budget include:

Taxation and Revenue Measures:

Tax Increases: The budget outlines £40 billion in tax hikes, marking the most substantial rise since 1993.

National Insurance Contributions (NICs): Employers’ NICs will increase from 13.8% to 15% on salaries above £5,000 starting April 2025, while employees’ NICs remain unchanged.

Capital Gains Tax (CGT): Effective immediately, the lower CGT rate rises from 10% to 18%, and the higher rate from 20% to 24%, aligning with rates on property sales.

Inheritance Tax: The threshold is frozen until 2030. From April 2027, pensions will be included in taxable estates, and from April 2026, agricultural property will have a £1 million exemption, with amounts above taxed at 10%.

Non-Domiciled Tax Status: The non-domiciled tax regime will end in 2025.

Wages and Social Support:

Minimum Wage: The National Minimum Wage will rise by 6.7% to £12.21 per hour from April 2025 for employees aged 21 years and above

On 1 April 2023, the main Corporation Tax (CT) rate was increased from 19% to 25%. A small profits rate of 19% was introduced for companies with profits below £50,000 (the lower limit).
Marginal relief was brought in for companies whose profits fall between the lower limit and £250,000 (the upper limit).
For some companies the lower and upper limits will be much lower, and certain companies will be entirely excluded from the small profits rate and marginal relief.

If your payment is more than 15 days overdue, first and second late payment penalties apply.
https://www.gov.uk/guidance/how-late-payment-penalties-work-if-you-pay-vat-late