Labour’s first Budget hopes to raise UK taxes by £40 billion. Highlights are as follows:

Income Tax

• No increase. Threshold freeze will end from April 2028.

National Insurance Contributions (NICs)

• No change to employee NICs. Threshold freeze will end from April 2028
• Employer NICs will increase to 15% from 6 April 2025, and the contribution threshold will decrease from £9,100 to £5,000.

Capital Gains Tax

• Basic rate (currently 10%) increased to 18%; higher rate of 20% to 24% from 30 October 2024.
• Rates for Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) and Investors’ Relief will rise from 10% to 14% from 6 April 2025, and 18% from 6 April 2026.

Corporation Tax

• No major changes announced.

Inheritance Tax (IHT)

• IHT thresholds frozen until 2030 (previously 2028). No change to headline rate of IHT (40%).
• From 6 April 2026, assets qualifying for Agricultural Property Relief and Business Property Relief will attract relief at 100% up to a value of £1 million only, and at 50% over £1 million.
• Most pensions will be included in a person’s estate for IHT purposes from 6 April 2027.

Taxation of Non-UK Domiciled Individuals

• Domicile to be abolished as a tax concept, and a residence-based tax regime to replace it. This will impact personal and trust taxation.

Stamp Duty Land Tax (SDLT)

• Surcharge for second home purchases to increase from 3% to 5% from midnight on 30 October 2024.
• SDLT on enveloped dwellings to increase from 15% to 17%.

Private Schools

• Standard rate VAT at 20% to apply to private school fees from 1 January 2025.
• Business rates relief to be abolished from April 2025.