We have now had the long awaited budget from the Labour party. The main points are as follows;
If you employ people
Employers NIC has increased from 13.8% to 15%. Also, the level at which it is payable has decreased from £9,100 to £5,000 meaning that more of your employees pay will attract employers NIC.
There has however been an increase in the Employers Annual Allowance from £5,000 to £10,500 meaning you don’t pay the first £10,500 of Employers NIC.
These changes are from 6th April 2025.
What this practically means is that if you employ a number of people, the NIC cost will increase. This is however aimed at all but the very smallest of employers, who might actually benefit.
This does potentially give us some good planning opportunities for director only employees.
The minimum wage rates have also increased, potentially aggravating the NIC cost.
If you sell something
The rates of tax you pay on capital gains has increased with immediate effect from 10% to 18% for basic rate payers and 20% to 24% for higher rate payers, bring it in line with property sales.
If you buy a second house
The rate of additional Stamp duty on second homes has increased from 3% to 5%, again, immediately.
If you have a pension pot when you die
Previously this was exempt from Inheritance Tax, but no more. Any pot passing down on the death of the remaining spouse will now be part of the estate for tax purposes. Specific pension advice is needed if you are in this situation.
There was of course a lot more detail in the speech, and a lot more to come as details become clearer over the next few days.