Some Key Takeaways from the UK Budget Review

Chancellor Rachel Reeve’s  2024 UK budget review focused on the Labour Party’s mandate of restoring stability to and rebuilding Britain by raising taxes by £40bn. Expected Government budget changes were the abolishment of the outdated non-dom tax regime and an increase in capital gains tax and NI for businesses.  

• Capital gains tax to increase – CGT to increase to 18% on the lower rate and 24% on the higher rate. This is a tax charged on profits made from selling assets like second homes and shares, for example.
• Inheritance tax threshold freeze extended to 2030.
• National insurance will increase for employers from 13.8% to 15%.
• Non-dom tax regime to be abolished – residence-based tax scheme to be introduced for those coming to the UK on a temporary basis. This applies to UK residents whose permanent home – or domicile – is outside the UK for tax purposes, meaning they do not pay UK tax on money they make elsewhere in the world.
• VAT on private school fees – as of Jan 2025, VAT will be charged on private school fees.
• Air passenger duty increase in line with inflation for economy short haul flights and a 50% increase for private jets.
• Freeze on fuel duty.
• Income tax and NI thresholds to rise with inflation – from 2028-2029, personal tax thresholds will be uprated in line with inflation.
• A Draft will cost a penny a pint less.
• NHS Budget increases – a £22.6bn increase for day-to-day spending and £31bn for the capital budget.
• Stamp duty land surcharge for second homes increased to 5%.