Autumn Budget 2024 - Early Reactions

In this short episode join Mark Morton as he reflects on the Autumn Budget announcement delivered by Chancellor Rachel Reeves today (30 October).

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Transcript

[00:00:00] Hello, it's Mark Morton here from Mercia Group. Uh, it is currently 1:56pm on the 30th the Chancellor has just finished her pretty long speech. Uh, I think my instant reaction, I mean it's interesting, Uh, some of this had been trailed in terms of concepts and they tested the water with various ideas. Trying to keep away from the politics of it, but I think what we've just seen is a definitive, we're gonna tax high, spend high decision. 

[00:00:33] Um, Which you can agree with, you can disagree with, um, but significant tax rises, 40 billion of tax rises, with a view to investing in various things. I think what was missing to me was the growth aspect, very little detail on the growth. The specifics of growth, um, reference to the H, uh, to Labour Party's Seven Pillars, which I suspect has been taken from, uh,

[00:01:02] H. Lawrence of Arabia's Seven Pillars of Wisdom. Whether these Seven Pillars, uh, are of wisdom, we shall see in due course, no doubt. Tax wise, um, no great surprise that employers N. I. goes up from 20, 25 to 15 percent. Uh, the threshold at which employers pay essentially half to five grand. Um, a bit of an offset in terms of smaller businesses because the employment allowance going up to 10, 000. 

[00:01:32] So a little bit of swings and roundabouts for, um, smaller businesses. Uh, but a significant rise there, CGT up from 18 to 24%. Um, BIDR retained currently, um, at a million pounds and 10% rate. Interestingly, the rates going up to 14% and then 18%, um, in the future. So sort of keeping a little bit of track with that differential from those. 

[00:02:06] main rates of CGT. The freeze on inheritance tax threshold, which has been there for the best part of 20 years anyway, that's been extended to 2030. The Chancellor came to point out that only 6% of estates actually pay inheritance tax. I would suggest with the next statement that pension funds will be brought within the inheritance tax net will mean that rather more than 6 percent of estates will end up paying. 

[00:02:33] A really big hit on private businesses, private individuals, people who seek to save in their lifetimes, doesn't affect in the same way public service pensions quite interestingly. Um, I think that's a really big change that a lot of people won't necessarily understand up front but will. You know, we'll disincentivize possibly people saving for their retirement. 

[00:02:59] Um, we shall see. Agricultural property relief and business property relief, essentially what's been done here is to suggest to going to an old retirement relief concept of a flat amount of relief, the first 1 million pounds of value, and then 50 percent of the balance. So, again, depending on the size of your, uh, estate for agricultural business property relief, then that could be a massive effect. 

[00:03:26] It could still be a 100 percent exemption, um, but certainly a change for some. Proceed with the non DOM rules or non DOM changes, um, proceed with the freezes in tax thresholds and NI thresholds until 2028 with the suggestion then that the rates will go up, um, in 2028 but in line with inflation. Uh, I suppose the other thing that did strike me as a generality here, um, one year spending review. 

[00:03:57] Now normally governments would have undertaken at this stage a comprehensive spending review for the lifetime of this parliament and that has clearly not taken place. So, I suppose it depends on your view of life here. Why has that not taken place? Why are we dealing with a short term spending position? 

[00:04:15] Um, not entirely clear. The other thing which is worth doubting, I suppose, uh, stamp duty land tax on second homes going up to five percent essentially overnight. So a number of changes there. A lot of them born by business, uh, some of them essentially owned by business owners. Uh, we shall await now the documents being released and see whatever detail, uh, devil is in the details. 

[00:04:42] So, uh, on that happy note, happy Halloween. Hopefully this doesn't give you too many sleepless nights. And we will update you in a bit more detail in due course. Cheers, everybody. 

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