Our experts respond to the Autumn Budget

Earlier today, Chancellor Rachel Reeves outlined the tax, welfare and public service spending decisions in her Autumn Statement, putting forward the Labour Party’s first Budget in 14 years. Given that the new Labour government had already admitted that the Budget would be ‘painful’ all eyes were on Downing Street to find out what lies ahead for the UK. Taking a view across Corporate, Employment and Commercial Property, our expert lawyers have responded to the statement, covering what the measures might mean for their various practice areas.

As expected, an increase in capital gains tax (CGT) has been announced. Whilst the extent of the increase is not as large as feared, with the lower rate of CGT rising from 10% to 18%, and the higher rate from 20% to 24%, bringing this in line with the rates on residential property sales, which remain at 18% and 24%. In addition, Business Asset Disposal Relief (BADR) will rise from 10% to 14% from 6 April 2025 and match the main lower rate of 18% from 6 April 2026 with the lifetime limit being maintained at £1 million for all qualifying disposals.

Corporate and Commercial

Senior Partner Mary Anne Fedeyko comments “These are arguably still significant increases which some speculate could dissuade investment, or encourage entrepreneurs to relocate elsewhere to a more favourable tax regime. But given that these rates are, according to the Chancellor, still the lowest rate of CGT in any European G7 country, the UK should remain an attractive jurisdiction for investment.”

Director Caroline Nicholls adds “Those who burnt the midnight oil to get business sales over the line over the past few weeks will no doubt feel slightly relieved that their extra efforts were not wasted. But for those still planning on selling their businesses it would be wise to aim to complete before 6 April next year  before BADR rates change.”

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Employment

Employment Law Specialist Jolyon Berry comments "As was widely anticipated there has been an increase to Employer’s NI liabilities (or a ‘tax on employment’ according to David Buik) which may tempt some businesses to reduce their discretionary spending on staff.  However our advice is to do all possible to maintain employee engagement and morale and recognise the value staff put on some very small gestures of goodwill that do not necessarily cost huge amounts.  As there were no changes to the rules around salary sacrifice arrangements, this continues to be a way for employers to reduce NI liabilities while incentivising staff to increase their pension investments, for example."

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Wills & Estates

Director Rob Ashworth comments "There was a lot of anticipation surrounding Capital Gains Tax (CGT), indeed there has already been many significant changes to this tax over the past couple of years and for many it's seen as an easy target! Rachel Reeves has now outlined her plans, advising that they need to be within her manifesto to drive growth forward. For individuals up to the basic rate limit (BRL) the rate will rise from 10% to 18% and for individuals above the BRL the rate has increased from 20% to 24%, bringing the rates in line with the rate for CGT on Residential Property (*subject to certain exclusions and conditions)."

Visit our Wills & Estates page here.

Remember, TSP are here to help businesses and individuals understand and manage the implications of the Budget. Please do visit our service pages listed above or call our offices on 01206 574431 for further assistance.