UK 2024 Budget Overview
The highly anticipated UK Budget for 2024, delivered by Chancellor Rachel Reeves, marks Labour’s first 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 20% to 24% for higher rates, while inheritance tax thresholds are frozen longer.
2. Business Taxes: National Insurance for companies rises to 15% on salaries above £5,000, and private equity profits will be taxed at up to 32%.
3. Wages & Pensions: Minimum wage increases to £12.21 per hour, with a 4.1% rise in state pensions.
4. Transport: Fuel duty cuts extended; new air passenger taxes introduced for short-haul and long-haul flights.
5. Alcohol & Tobacco: New flat-rate tax on vaping liquids and increased duties on tobacco and non-draught alcoholic drinks.
6. Public Services: Increased funding for health and education by 4.7%, but cuts to the Home Office budget.
7. Housing: Social housing rent increases and stamp duty changes for property purchases.
8. Economic Outlook: Projected growth of 1.1% this year, with inflation expected to average 2.5%.
9. Non-Dom Tax Changes: Non-domiciled individuals face potential new rules aimed at tightening the tax system, increasing scrutiny and possibly leading to higher tax liabilities for high earners.
10. Additional Measures: £11.8bn allocated for victims of the infected blood scandal and increased devolution payments to Scotland, Wales, and Northern Ireland.
As we analyze the implications of the UK Budget 2024, it’s clear that the proposed tax increases and spending adjustments reflect a significant shift in fiscal policy aimed at funding public services. While concerns about potential stifling of investment and economic growth are valid, especially regarding the non-dom tax issue, it’s crucial to remain optimistic. We will need to monitor how these measures unfold and their actual impact on the economy in the coming months.
As experts in internationalizing projects and navigating complex cross-border operations, if you need advice on understanding these changes, please do not hesitate to contact us.
Author: Ramiro de Iturralde
