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The Autumn Budget 2024, under Labour's first term, will be delivered on the 30th of October 2024 by the Chancellor of the Exchequer Rachel Reeves. Whist the government have pledged to provide economic stability, which will come as welcomed news to businesses after several years of uncertainty, it is vital this budget demonstrates that the needs of businesses are understood.
The Prime Minister, Kier Starmer, however has warned the budget will be ‘painful’ after discovering a £22bn ‘black hole’ in public finances. There are unknown answers to how this money will be recovered but it is highly probable there will be hikes in tax to generate the revenue needed.
Until the budget is delivered we can only speculate on what it will contain and what it means for businesses, but let’s look at the main predictions of changes we are expecting to see.
Labour is likely to maintain the current rates of corporation tax until 2029, continuing the policies of the previous government.
There is speculation about reforms to CGT, particularly around Business Asset Disposal Relief, which could impact those selling businesses. If changes occur, businesses may rush to liquidate before the new rules take effect.
Although Labour previously said they had no plans to reform inheritance tax (IHT), there are hints of possible tweaks, especially affecting agricultural and business exemptions.
VAT will be introduced on private school fees starting in 2025. Additionally, charitable business rates relief for these schools will also be removed from April 2025.
Labour has promised to continue Full Expensing and the Annual Investment Allowance, which are important for businesses planning significant capital expenditure.
There might be new incentives or regulations aimed at promoting green investments and innovation, particularly as Labour has signaled support for sectors like electric vehicles and renewable energy.
Labour plans to release a comprehensive roadmap within six months, which will outline further changes to business taxation policies.
These measures reflect Labour's intent to balance fiscal responsibility with economic growth while making changes to tax reliefs and exemptions that could impact various industries.
Of course, we can only speculate what will be announced on the 30th of October but the aspects outlined above are our predictions that could affect your business. Watch this space for our detailed analysis following the budget with an in-depth guide to the budget and what it means for your business and next steps.
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Posted On: September 18, 2024
