The UK’s autumn budget for 2024 unveiled a range of economic measures aimed at supporting traditional businesses and startups in an evolving economic landscape. According to the UK business immigration firm Goldman Solutions, several key provisions could have a significant impact on companies across industries, from tax incentives to regulatory changes.
As businesses continue to navigate uncertainty, these new measures offer a glimpse into the government’s strategy to boost economic stability and encourage investment in the private sector.
Corporation Tax Rate
In line with previous announcements, the main corporation tax rate will remain capped at 25% for the duration of this parliament. Small businesses will continue to benefit from the small profits rate of 19%, with the thresholds for marginal relief staying unchanged.
Additionally, several investment reliefs have been maintained and expanded:
- Capital Allowances: Companies will continue to benefit from 100% first-year allowances for new plant and machinery under the main rate, while new special rate plant and machinery will qualify for 50% first-year allowances. The Annual Investment Allowance, which offers 100% first-year relief on plant and machinery investments up to £1 million, will also remain in place.
- R&D Reliefs: The government will retain the current rates for the R&D expenditure credit and the enhanced support for R&D-intensive SMEs.
- Intangible Assets: The Patent Box regime, which offers a lower corporation tax rate for profits linked to patents and similar intellectual property, will be preserved, along with the existing treatment for intangible fixed assets.
Corporation Tax Roadmap
The government has set out a corporate tax roadmap outlining scheduled changes to business taxation over the next few years. This includes measures affecting corporation tax, capital allowances, R&D reliefs, and tax administration. Goldman Solutions highlights that the roadmap also confirms several upcoming consultations that might affect UK entrepreneurs:
- A consultation on the tax treatment of predevelopment costs will be launched later this year.
- In Spring 2025, consultations will focus on:
- A new process allowing investors in major projects to access advance tax clearances.
- Expanding the use of advance clearances for R&D reliefs.
Additionally, the government plans to explore extending full expensing to assets bought for leasing or hiring when fiscal conditions allow.
The roadmap also signals a second-round consultation on the UK’s transfer pricing rules, including potential reforms to the diverted profits tax and permanent establishments. This will include discussions on lowering exemption thresholds for medium-sized businesses and expanding reporting requirements for multinationals.
Internationally, the UK continues to support global efforts to simplify cross-border tax rules, particularly under the OECD’s Pillars 1 and 2 agreements. The government intends to remove the UK’s digital services tax once an international multilateral solution is in place and to align domestic rules with updates to Pillar 2.
Increase in Employer NICs
As expected, the chancellor’s pre-budget hints have been confirmed: employer National Insurance contributions (NICs) will increase starting 24 April 2025. The rate will climb from the current 13.8% to 15%, aligning closely with prior forecasts.
In a significant shift, the salary threshold under which employers are exempt from NICs will also be drastically reduced by 45%. The threshold will fall from £9,100 to £5,000 annually, impacting businesses that previously benefited from lower NIC liabilities.
Goldman Solutions points out that this change will be partially offset by an increase in the Employment Allowance. The allowance, a statutory deduction to reduce employer NICs liabilities, will more than double — from £5,000 to £10,500. Additionally, the government will expand eligibility for the allowance, removing the previous cap that restricted its availability to employers with annual NICs liabilities under £100,000.
Capital Gains Tax Increase
The UK government has confirmed that capital gains tax (CGT) rates for individuals will rise on disposals made from 30 October 2024. The lower CGT rate, which currently stands at 10%, will increase to 18%, while the higher rate will rise from 20% to 24%. The lower rate applies to gains within an individual’s unused basic rate band, with any excess taxed at the higher rate.
However, there will be no increase in CGT rates on the disposal of residential property, which will continue to be taxed at the same rates as other assets, with the exception of carried interest.
For business owners, the tax reliefs associated with Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) and Investors’ Relief will also see increases. From 6 April 2025, the CGT rate for these reliefs will rise from 10% to 14% and then to 18% from 6 April 2026.
In addition, Investors’ Relief will be subject to a significant change in its lifetime limit. From 30 October 2024, the maximum qualifying disposals eligible for relief will be reduced from £10 million to £1 million. Investors’ Relief applies to investments in ordinary shares of unlisted trading companies or holding companies of trading groups, provided these shares have been held for at least three years, starting from 6 April 2016.
End of Non-Domiciled Tax Status
As noted by Fyodor Goldman, founder of Goldman Solutions, the UK government has confirmed plans to abolish the non-UK domiciled (non-dom) tax regime, which currently offers tax breaks on foreign income and gains. The changes will take effect from 6 April 2025, marking the end of the remittance basis for foreign income and capital gains for non-domiciled residents.
Under the new rules, individuals who have not been UK residents in any of the previous 10 years will receive a four-year exemption from tax on foreign income and gains. After the fourth year, foreign income and gains will be taxed in the same manner as those of other UK residents.
The government has introduced two key transitional measures to ease the shift:
- Temporary Repatriation Facility: Foreign income and gains accrued before 6 April 2025, which are subject to tax under the remittance basis, can benefit from a special facility. This allows individuals to treat certain income and gains as remitted, with a reduced tax rate of 12% for the first two years and 15% in the third year, ending 5 April 2028.
- CGT Rebasement Option: Individuals who were not UK domiciled or deemed UK domiciled in any prior tax year may elect to rebase the value of assets held on 5 April 2017 to their market value on that date for capital gains tax (CGT) purposes.
In a further change, the government will also reform the Overseas Workday Relief (OWR) from 6 April 2025. The revised relief will apply to individuals who qualify for the four-year exemption on foreign income and gains. The new OWR will allow tax-free remittance of overseas employment income, with a cap set at the lower of 30% of qualifying overseas income or £300,000 per tax year. Eligible individuals will be able to claim the relief for up to four years.
Higher Late Payment Interest and Strengthened Compliance Measures
The UK government has announced a significant increase in the interest rate charged on late tax payments, set to take effect from 6 April 2025. The new rate will rise by 1.5 percentage points, pushing the interest rate on overdue tax liabilities to 4% above the Bank of England base rate. The increase aims to encourage timely tax payments, but it will apply uniformly to all unpaid taxes, whether due to intentional withholding or ongoing disputes. As such, the higher rate will also raise the cost of resolving tax disputes, though payments on account of disputed tax will continue to attract a reduced interest rate of 1% below base if repaid by HMRC.
Boosting HMRC Compliance and Anti-Avoidance Efforts
Goldman Solutions indicates that the government’s budget also outlines plans to enhance tax compliance, with a focus on tackling offshore non-compliance. Significant investments will go towards expanding HMRC’s compliance and debt management teams, as well as upgrading its IT and data systems. These efforts will target wealthy individuals, intermediaries, and corporations involved in offshore tax evasion.
To close specific loopholes, the government plans to legislate on several fronts:
- Company Car Tax: Tightening rules to curb schemes designed to avoid company car tax.
- Capital Gains Tax Avoidance: Closing a loophole allowing avoidance of CGT when an LLP is liquidated and its assets are transferred to members or connected parties.
- Loans from Close Companies: Closing avenues for avoiding anti-avoidance rules relating to loans from close companies to their shareholders.
The government also plans a series of measures aimed at the tax advisory sector. These include mandatory registration for tax advisers who interact with HMRC on behalf of clients (beginning April 2026), a review of the regulatory framework for tax advice, and consultations on increasing HMRC’s powers to take action against advisers facilitating non-compliance. Additionally, the government will explore measures to combat promoters of tax avoidance schemes.
Strengthening HMRC’s Information and Data Powers
A key element of the Budget is a consultation on strengthening HMRC’s ability to correct taxpayers’ positions for previous years. Currently, taxpayers who discover errors in their filings outside the statutory time limits are not required to correct them unless related to certain offshore tax liabilities. The government is considering introducing a “requirement to correct” rule, which would compel taxpayers to amend mistakes and could carry significant penalties for non-compliance.
Expanding Crypto Asset Reporting
The government has also committed to extending its Crypto-Asset Reporting Framework (CARF) to include UK-resident crypto asset service users, in addition to foreign residents. The framework, which primarily focuses on gathering information on foreign users and exchanging data with relevant jurisdictions, will now require crypto service providers to automatically report detailed information on all users, both domestic and international. This move signals the government’s intent to tighten regulation in the fast-evolving crypto space and enhance transparency.
Looking Ahead
While the UK’s autumn budget has drawn significant criticism from various sectors of the business community, Goldman Solutions believes that businesses with strong margins and a clear growth strategy will continue to thrive, even amid the changes.
One notable provision in the budget is the introduction of a four-year exemption on foreign income and gains as part of the government’s non-domiciled tax changes. This policy shift makes relocating to the UK an increasingly appealing option for business people, particularly those looking to benefit from tax relief while continuing to expand their global operations.
