AN ANAYSIS OF THE UK AUTUMN BUDGET FOR 2024

The UK Autumn Budget for 2024, delivered by Chancellor Rachel Reeves, outlined several key measures aimed at shaping the country's fiscal landscape amidst ongoing economic challenges.

Healthcare Funding: A £22.6 billion increase in the day-to-day NHS budget and £3.1 billion in capital expenditure for 2024-2025 aims to address growing demands and bolster long-term care infrastructure. Reeves confirmed a focus on increasing NHS productivity by 2% annually, with additional investment to tackle waiting lists and improve appointment access.

Housing and Property: A £5 billion investment was announced for housing development, with a promise to build 1.5 million new homes during the current parliament. The government also targeted the housing market with a rise in stamp duty for second homes and landlords, increasing the surcharge from 3% to 5% to help ease competition for first-time buyers

Tax Changes: There were notable shifts in capital gains tax (CGT), with the rates rising from 10% and 20% to 18% and 24%, respectively. This is seen as a move to increase tax revenue while impacting investors and business owners. The Chancellor also confirmed the removal of business rates relief for private schools from April 2025, as part of an ongoing push for fairness in the tax system.

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Energy and Environment: A key energy-related change was the increase in the energy profits levy from 35% to 38% from November 2024, with further support to maintain decarbonization incentives

Non-Dom Tax Status and Pensions: Significant reforms were made to the tax system for non-UK domiciled individuals. The "remittance basis" for non-doms will be abolished in April 2025, replaced with a system that taxes foreign income and gains once they are brought into the UK. Additionally, inherited pensions will be subject to inheritance tax from 2027

The Budget's measures, alongside freezing fuel duties for another year, reflect the government's attempts to balance fiscal responsibility with social investments. The full impact on economic growth and individual finances will become clearer over the coming months as these changes are implemented.

In her presentation of the 2024 Autumn Budget, Chancellor Rachel Reeves focused heavily on social equity and long-term economic stability. One of the most significant announcements was the increase in the National Health Service (NHS) budget. Reeves pledged a £22.6 billion boost to day-to-day operations, alongside a £3.1 billion increase for capital projects. This investment aims to alleviate pressure on the NHS, which has faced increased demand and chronic understaffing. Additionally, the government plans to introduce reforms to improve productivity within the NHS, targeting a 2% annual growth. Key measures include an investment to deliver an extra 40,000 elective appointments each week to address the backlog and improve patient access

The housing sector also received substantial attention in the Budget. In a bid to tackle the ongoing housing crisis, the government allocated £5 billion towards building new homes, with a goal of constructing 1.5 million houses over the course of this parliament. However, the Budget did not simply focus on supply-side issues but also sought to address the role of property investors. A sharp increase in stamp duty for second homes and buy-to-let properties is intended to make it more difficult for investors to outbid first-time buyers in a competitive housing market. The surcharge for these buyers will rise from 3% to 5%, effective immediately

In terms of taxation, the Budget introduced significant changes to capital gains tax (CGT), which will see rates rise from 10% and 20% to 18% and 24%, respectively. This change is expected to impact business owners and investors, particularly those with large portfolios. The government also announced a crackdown on tax avoidance by foreign investors and corporate tax avoidance strategies, aiming to increase revenue by ensuring that multinational companies contribute their fair share to the UK's economy. Alongside these measures, there was confirmation that private schools will lose their business rates relief from April 2025, aligning with the government's commitment to ensuring that wealthy institutions contribute more fairly to public finances

Another major policy shift is the government's stance on energy taxation. The energy profits levy, which targets large oil and gas companies, will increase from 35% to 38% from November 2024. The increase aims to boost government revenues, which are being redirected towards supporting energy decarbonization initiatives. Alongside the rise in the levy, the government introduced a decarbonization allowance designed to mitigate the impact of the tax increase on businesses transitioning to greener energy practices. While these measures are controversial, they reflect the government's commitment to addressing both fiscal challenges and climate change

Looking ahead, the Autumn Budget also set the stage for significant changes in the taxation of non-UK domiciled individuals. From April 2025, the "remittance basis" of taxation, which has allowed non-doms to pay UK tax only on income and gains brought into the country, will be replaced by a new residence-based system. This shift is expected to have a profound effect on wealth management and estate planning, particularly for those who have relied on the remittance basis to shield foreign assets from inheritance tax (IHT). The changes to IHT will also affect non-UK assets, which will now fall under the tax regime for individuals who have been UK residents for a decade or more

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Furthermore, the Budget highlighted the government's commitment to supporting vulnerable populations, with a focus on carers and pensioners. The Chancellor confirmed that pensions would rise in line with the triple lock guarantee, ensuring a 4.1% increase for 2025-26, providing a boost of up to £470 per year for 12 million pensioners. Carer’s Allowance will also see a significant increase, marking the largest rise in the benefit's history since its introduction in 1976. These measures reflect the government's emphasis on social care and improving financial security for the most vulnerable in society

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