Interim Summary of Chancellor’s Budget Speech 2024

Chancellor’s Budget Speech – Summary posted at 14:00pm 30 October 2024

In her first Budget since Labour’s return to power, Chancellor Rachel Reeves outlined measures to restore economic stability and prepare for future investments. This Budget, the first Labour Budget since 2010, spanned multiple key sectors with an overarching theme of stabilising and investing in the UK’s future. Below is an interim summary of they key points affecting you and your business. A more detailed Budget Report will follow in due course. 

Economic Forecasts and Fiscal Measures

The Office for Budget Responsibility (OBR) projects an average inflation rate of 2.5% for this year, decreasing to 2.0% by 2029. GDP growth is expected to exceed 1.5% annually over the next parliamentary term. To cover a £22 billion fiscal shortfall, the government plans to raise taxes by £40 billion while committing to no borrowing for day-to-day spending. A target of 2% savings from government departments is set to enhance efficiency.

Tax Changes

Notable tax measures include a crackdown on tax avoidance promoters and adjustments in National Insurance Contributions (NIC). Employers will see NIC rise by 1.2%, with a significant reduction in the secondary threshold. Capital Gains Tax (CGT) rates are set to increase by 4%, a moderate rise compared to potential alignments with higher income tax rates, which could have been more burdensome. The Inheritance Tax Threshold will remain frozen for another two years. The Chancellor also confirmed the maintenance of the Business Asset Disposal Relief rate at 10% until April 2025, when it will rise to 14%.

Pensions and Investments

Changes in the treatment of inherited pensions, which will now be subject to Inheritance Tax, were particularly highlighted by Sophie Haslehurst, Chartered Financial Planner at Integrity365. Additionally, there was strong support for continued investments in Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCTs), as well as a 50% relief on Inheritance Tax for AIM shares.

Business and Employee Implications

The Budget introduces a mixed bag for businesses, particularly with the increase in employer NIC countered by a doubling of the employment allowance to £10,500. This adjustment removes many small businesses from the NIC charge altogether, easing some of the new burdens.

Infrastructure and Long-term Investments

In terms of infrastructure, the government committed to extending the HS2 project to Euston from Old Oak Common. Changes to debt rules were announced to allow for increased government investment in priority areas like the NHS and national infrastructure.

Commentary from Beavis Morgan Experts

Neal Groves, Tax Partner, and Joanne Holland, Tax Director at Beavis Morgan, provided expert insights throughout our Autumn Budget live coverage. They discussed the implications of the Budget for businesses and individuals, emphasising the need for careful planning in light of the new tax measures. Their analysis helps unpack the complexities of the Budget, guiding clients through potential impacts on their financial and business planning.

Next Steps

Beavis Morgan will be reviewing the details of the Budget and providing a comprehensive summary report in the next day or so. This report will delve deeper into how the announced measures affect different sectors and what businesses and individuals can do to adjust to the new fiscal environment.

Conclusion

This Budget sets a clear path for addressing immediate fiscal challenges while laying down strategies for future economic growth. As detailed in the live feed, Beavis Morgan remains committed to assisting clients through these changes, ensuring that businesses and individuals can navigate the new fiscal landscape effectively.

For further details and personalised advice, contact your usual Beavis Morgan partnerNeal Groves or Joanne Holland. Alternatively, contact Sophie Haslehurst at Integrity365 for specific financial planning concerns related to pensions and investments.

 

Disclaimer: The information provided in this Chancellor’s Budget Speech Summary is intended for general guidance and informational purposes only. The details shared are based on initial announcements and may be subject to further clarification and amendments as full details are released. Beavis Morgan accepts no liability for any actions taken or not taken based on the information provided during this live event. For tailored advice that specifically addresses your individual or business circumstances, please consult with a professional adviser.