The Budget in Short!

Hi everyone,   

Finally, the budget rumours can be laid to rest 🪦.

👻 Not as scary as the rumours and hopefully provides a bit of stability for individuals and businesses but taxes are rising!

Here are some of the key changes👇:

🔹 Employer NIC Increase - Threshold Reduced
Employer National Insurance rises from 13.8% to 15%, with the threshold lowered to £5,000. Single directors may cut salaries to £5K to avoid NIC, opting for dividends, which raises corporation tax. Despite claims of minimal impact on small businesses, many startups will face higher costs, limiting growth funds. Whilst the actual rise is just a mere 1.2%, this in percentage growth terms is a rise of 9% in employers’ national insurance – as significant amount for any business!

🔹 Business Asset Disposal Relief
Business Asset Disposal Relief rate increases to 14% in April 2025 and 18% in 2026, with the £1M lifetime allowance unchanged. This alignment with standard CGT rates may reduce incentives, potentially pushing UK entrepreneurs abroad. Sell before April 2025, and the rate will be 10%!

🔹 Capital Gains Tax (CGT) Increase
The lower CGT rate rises from 10% to 18% and the higher from 20% to 24%, aligning with residential property. While Reeves notes the UK's low 18% rate, the 24% rate is higher than a handful of countries in Europe.

🔹 Income Tax, VAT, and NI Freeze
No individual NI, VAT, or income tax increases, but frozen allowances continue through 2028. Based on inflation since 2021-22 - the allowance should now be: £15,430

🔹 Employment Allowance Rise
Employment Allowance increases from £5,000 to £10,500, helping small businesses offset NIC increases.

🔹 CGT on Carried Interest
CGT on carried interest to rise to 32% by April 2025. Relevant to anyone working in Private Equity!

🔹 Non-Dom Tax Status Abolished
The non-dom regime ends in 2025, shifting to a residence based scheme that may impact the UK's appeal to international investors, with an extended repatriation period supporting current non-domiciled individuals.

🔹 Stamp Duty for Second Properties
Stamp duty surcharge increases from 3% to 5% with immediate affect. Could lead to increased rental prices…

Much to digest, and I will be sharing more views on this on my webinar tomorrow evening, make sure you book on the link below:

Join me on October 31st at 7PM UK Time, where I’ll help break down what’s coming and how to navigate it. 

Reserve your spot here

Don’t miss this chance to get ahead of the changes and how you can plan your future!

See you there! 

Arun