Summary of the UK Budget 2024
Summary of the UK Budget 2024
The long-awaited UK Budget 2024, presented by Chancellor Rachel Reeves, marks Labour’s first budget since regaining power. Key points include:
1. Personal taxes: Income tax and VAT rates remain unchanged, but capital gains tax increases from 10% to 18% and from 20% to 24% for the highest rates; in addition, inheritance tax thresholds are frozen for a longer period of time.
Corporate taxes: National Insurance for companies is raised to 15% on salaries over £5,000, and private capital gains will be taxed up to 32%.
Wages and pensions: Minimum wage increases to £12.21 per hour, with a 4.1% increase in state pensions.
4. Transportation: Fuel tax cuts are extended; new taxes are introduced for air passengers on short- and long-haul flights.
5. Alcohol and tobacco: New flat-rate tax on vape liquids and increases in taxes on tobacco and non-barrel alcoholic beverages.
6. Public services: 4.7% increase in funding for health and education, but cuts in the budget of the Ministry of the Interior.
7. Housing: Increases in social housing rents and changes in the stamp tax for property purchases.
8. Economic Outlook: Growth is expected to be 1.1% this year, with expected inflation of 2.5%.
9. Changes in non-domiciled taxation: Non-domiciled individuals face possible new rules aimed at tightening the tax system, increasing scrutiny and possibly leading to higher tax liabilities for high income earners.
10. Additional measures: £11.8 billion allocated for victims of the infected blood scandal and increased decentralization payments to Scotland, Wales and Northern Ireland.
As we analyze the implications of the UK Budget 2024, it is clear that the proposed tax increases and spending adjustments reflect a significant shift in fiscal policy aimed at funding public services. While concerns about the possible restriction of investment and economic growth are valid, especially in relation to the issue of non-domiciles, it is crucial to maintain an optimistic outlook. It will be important to closely follow how these measures develop and their real impact on the economy in the coming months.
As experts in project internationalization and the management of complex cross-border operations, if you need advice in understanding these changes, please do not hesitate to contact us.
Author: Ramiro de Iturralde