The Autumn Budget 2024, delivered by Chancellor Rachel Reeves on 30th October 2024, focuses on stabilising the economy, addressing long-term growth, and providing targeted support to households and businesses amidst global economic challenges.
Key announcements include:
1. Economic Growth and Fiscal Policy
Growth Forecasts: The UK economy is projected to grow at a slower rate than previously expected, but with signs of resilience. Growth for 2024 is expected to be modest, but inflation is forecasted to fall to around 2.5% by the end of 2025.
Debt and Deficit: The government aims to halve the budget deficit by the end of 2025-26. A focus is placed on reducing public sector borrowing over time.
2. Support for Households
Energy Support: The government will continue to provide targeted energy bill support, particularly for low-income households, as energy prices remain high.
Income Tax and National Insurance: There were no changes to income tax rates, but the income tax threshold will rise in line with inflation, helping to shield lower-income workers from "fiscal drag."
3. Business and Investment
Business Taxation: To encourage investment, the government will temporarily extend capital allowances for businesses, allowing companies to write off investments in plant and machinery against profits. This is aimed at boosting productivity and attracting more private sector investment.
Research and Development: A new fund will support innovation and R&D, with a focus on green technologies and artificial intelligence.
Corporation Tax: The government is keeping the corporation tax rate at 25%, with additional incentives for businesses that invest in green and innovative industries.
4. Green and Energy Transition
Green Investment: The Autumn Budget prioritises efforts to achieve net-zero emissions by 2050, including funding for clean energy projects, green technology, and carbon capture initiatives.
Energy Transition: New incentives will be introduced to support the transition to renewable energy and improve energy efficiency for both businesses and households.
5. Social Welfare and Public Services
NHS Funding: The NHS will receive an additional funding boost to support staffing and improve healthcare services, addressing the backlog caused by the pandemic.
Social Care: The government will introduce reforms to support the social care sector, with more funding and measures to improve care quality.
6. Tax Measures
Pension Tax Relief: The government will introduce changes to pension tax relief, targeting the high earners and making it more progressive.
Capital Gains Tax: Some adjustments to capital gains tax will be made, with a focus on ensuring that wealthier individuals pay a fair share.
7. Cost-of-Living Support
Wage Growth Initiatives: There are new schemes aimed at boosting wage growth for public sector workers, particularly in underfunded sectors like social care and education.
Universal Credit: There will be a gradual increase in the universal credit standard allowance to help lower-income individuals and families.
Overall, the Autumn Budget 2024 aims to balance fiscal responsibility with targeted support to foster economic stability, long-term growth, and social well-being. The government’s focus is on innovation, energy transition, and easing pressures on households, while preparing the UK for future challenges in an uncertain global economic environment.
For more information on how the Autumn Budget affects your business directly, check out our other blogs on Self Assessment Individuals, Subcontractors and Landlords
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