We’re used to leaks and early announcements in the run up to any Budget but were hit with a tsunami of announcements and speculation. As well as creating unnecessary tension, and potential Budget burnout, before it had even happened, it created a very febrile atmosphere as the first female Chancellor prepared to deliver the first Labour Budget for fourteen years. A big moment made bigger as the Office for Budget Responsibility (OBR) published its report on the much discussed £22bn ‘black hole’ left by the previous government, on the same day. Quite the moment.

As a spectacle, it didn’t disappoint. From criticism of the way the Conservatives had handled public finances over the last fourteen years and their alleged smoke and mirrors approach to the figures, to costing in compensation for the victims of the blood contamination and Post Office scandals, Chancellor Rachel Reeves covered everything from beer to potholes.

For a Budget to raise £40bn there was going to be pain. Following one of the chummiest exchanges seen for a long time in PMQs, and after we thought we’d heard all the big announcements, the devil was definitely in the detail. Whether a manifesto promise was broken in raising employer National Insurance (NI) contributions, the choice made by the Chancellor to do this was forecast to raise £25bn by the end of the current parliament. Without doubt the big hitter of the day – and the one that seemed to draw the most focus from the Conservative party. Putting the bulk of the revenue raising measures on employers’ shoulders and with increases to the minimum wage also announced, employers could be forgiven for feeling battered. But this was billed as ‘a grown-up Budget’ so there were swings and roundabouts: retail, hospitality and leisure businesses will receive 40% relief on business rates up to a cap of £125,000. Corporation tax will remain capped at 25%.

Others with so-called ‘broad shoulders’ were also targeted: VAT on school fees will be applied from January 2025 and non-dom status will be abolished from April next year. Neither of which was a surprise. Air passenger duty was also increased significantly for those who travel by private jet – the announcement of which probably got the biggest laugh of the day.

A rise in capital gains tax (CGT) was pretty much baked in before the Budget: the lower rate will rise from 10% to 18% and the higher rate will rise from 20% to 24%. Inheritance tax (IHT) thresholds remain frozen until 2030 but it’s worth noting that inherited pension pots will be included in IHT calculations from 2027. The rules are also being reformed on reliefs for inherited businesses and farms so that after the first £1m they will attract IHT at 20%.

Stamp duty will rise on Thursday 31^st October 2024 from 3% to 5% on purchases of second homes, buy-to-let residential properties, and for companies buying residential properties in England and Northern Ireland.

But this was also a big spending Budget: pensions, local authorities, schools, public services, infrastructure, research, the creative industry, and of course the NHS, all benefited. Rachel Reeves said she wanted to ‘turn the page on the last fourteen years’ and this was a Budget to: stabilise the economy and deliver change; protect working people and fix the NHS, and she threw down a challenge to the Conservatives: ‘if you disagree with the choices made, you have to set out what choices you would make under these circumstances.’ Let the unpacking begin.

Reviewing your finances is always important when changes occur. Keeping our service provision agile allows us to fully consider any mitigating action that could be necessary for your individual circumstances. There is no need to panic. However, if you are concerned in any way about changes announced in the Budget then please call us. We’re here to listen and alleviate any concerns you may have. You can trust us to be with you every step of the way.