Approved Finance Group: Key Takeaways from the 2024 UK Budget Announcement
- David Manklow
- Oct 30, 2024
- 2 min read
Chancellor Rachel Reeves has delivered the much-anticipated 2024 Budget, with significant implications for UK businesses, households, and the broader economy. Here’s a breakdown of what businesses and individuals should know.
Tax Adjustments
A £40 billion tax increase will fund a substantial portion of the Budget's initiatives. For employers, National Insurance (NI) contributions will rise by 1.2 percentage points in 2025, and NI thresholds are lowering, meaning more employers will contribute. Changes to Capital Gains Tax (CGT) will raise lower rates from 10% to 18% and higher rates from 18% to 24%, impacting business asset sales and residential property owners. Additionally, frozen tax thresholds will end in 2028, with inflation-adjusted increases set to follow.
Supporting Workers and Vulnerable Groups
With a focus on supporting low-income workers, the minimum wage for individuals 21 and over will increase by 6.7%, translating to £12.21 per hour, while those under 21 will see a rise to £10 per hour. The Budget also boosts disability and carers' benefits, including a rise in the earnings limit for Carers Allowance and additional funds for disability services.
Healthcare and Education Investments
The NHS is set to receive a £22 billion boost, providing additional resources for hospital appointments, procedures, and new beds. For education, significant investment will support the rebuilding of 500 state schools, with £2.3 billion allocated to core budgets. Free school breakfast clubs and increased funding for further education and special educational needs (SEN) signal government commitment to educational equity and infrastructure.
Transportation and Environmental Measures
In transport, HS2 rail project extensions are confirmed, promising improved connectivity between Birmingham and London. Additionally, air passenger duty on private jets will increase by 50%, and fuel duty will remain frozen to support consumer budgets. Environmental concerns are evident, with new taxes on vaping liquids and tobacco, aiming to both generate revenue and influence healthier habits.
Economic Outlook
Economic forecasts project modest GDP growth, with rates expected to improve gradually. Public sector borrowing will steadily decrease, aiming for fiscal balance by 2030. Inflation adjustments in everyday items, such as soft drinks and alcohol, are likely to increase costs but aim to sustain government revenues.
The 2024 Budget reflects the government’s strategy for economic resilience, emphasising increased contributions from businesses, improved support for vulnerable groups, and investments in health and education. As these measures come into effect, businesses and individuals will need to plan accordingly, anticipating both opportunities and adjustments.
For more details on how these changes may impact your financial strategy, Approved Finance Group’s team is here to help navigate these shifts effectively.
