On Wednesday October 30 the Chancellor Rachel Reeves presented Labour’s first Autumn budget in 14 years.

She confirmed her priorities as putting ‘more pounds in people’s pockets’, improve living standards and restore economic stability. Overall, the budget measures will raise an additional £40 billion in tax.

Below, we explore key elements from the Budget that will affect small businesses and individuals.

National insurance increase

Employees will not pay more national insurance directly, but from April 2025 employers’ national insurance contributions will increase by 1.2 percentage points to 15%. The NI threshold reduces from £9,100 to £5,000.

Recognising the potential impact of this on Britain’s smallest businesses, Ms Reeves is increasing Employment Allowance from £5,000 to £10,500. The chancellor says this means 865,000 employers won’t pay any National Insurance at all next year, and over one million will pay the same or less as they did previously.

Minimum wage increase

Reeves confirms that the ‘national living wage’ – the legal minimum for over 21s – will increase by 6.7% to £12.21. This equates to £1,400 a year for an eligible full-time worker.

A single adult rate will be phased in over time, to eventually equalise pay for under 21s.

No rise to income tax

Income tax will not increase, and the ongoing freeze in income tax thresholds will end in 2028. This will reduce the flow of taxpayers moving into higher tax brackets as salaries increase with inflation.

Business rates

Businesses will receive 40% relief on business rates for retail and hospitality up to a cap of £25,000.

Capital gains and inheritance tax

Capital gains tax will increase, with the lower rate moving from 10% to 18%, and the higher rate from 20% to 24%.

The government is extending the freeze on the threshold for inheritance tax, allowing £325,000 to be inherited tax free; £500,000 where property is involved and £1m by passing allowances on to a spouse.

£2bn in tax will be raised by reforming reliefs for business and agricultural assets. Beyond £1m, such assets will attract inheritance tax at 20%.

State pension spending to increase

Labour will make sure that “the people who powered our country receive the pension they are owed”, and remains commitment to the triple lock. Spending on the state pension is projected to rise 4.1% in 2025-26, equating to a £470 increase for over 12 million pensioners in the UK.

Fuel Duty

The chancellor rejected the option to increase fuel duty, and is maintaining the 5p cut from the previous government.

Electric Vehicles

To continue to support the take-up of electric vehicles, existing incentives will be retained in company car tax from 2028. The government will also increase the differential between fully electric and other vehicles in the first rates of Vehicle Excise Duty, as of April 2025.

Stamp Duty

Reeves announces the government will increase stamp duty land surcharge for second homes by 2% to 5% from 31 October 2024. There are no changes to the duty rates for First Time Buyers or people moving home.

Other measures

The additional tax will be raised in a variety of ways, with further announcements including:

• A new levy on vape liquid, which will be increased in line with tobacco.
• A cut in draught duty by 1.7%, which equates a penny off a pint in the pub.
• The non-dom tax regime will disappear from the tax system from April 2025, impacting UK residents whose permanent home for tax purposes is outside the UK.  According to the Office for Budget Responsibility, this package of measures will raise £12.7bn over the next five years.
• Private school fees will now be liable for VAT, and private schools will lose business rates relief from April 2025.
• Air passenger duty is to increase, at a level of an additional £2 on an economy short haul flight. But the duty for private jet passengers will increase by 50% to around £450 per person.

Inflation and growth forecasts

The chancellor will maintain the Bank of England’s 2% target for inflation.

Inflation will average 2.5% in 2024, rising to 2.6% in 2025 and dropping to 2% in 2029. Inflation was at 1.7% in September, below the Bank of England’s 2% target, down from 11% in October 2022.

The Office for Budget Responsibility slightly upgrades its growth forecast for this year but adjusts them down in later years. GDP growth is forecast to be 1.1% in 2024 and 1.6% in 2030.

Want to explore in more detail what the latest rules will mean for you or your business? As leading small business accountants in the Lune Valley we’re happy to advise. Get in touch with us today.

Last year, HMRC received more than 130,000 reports of scams and phishing attempts. With fraudsters becoming ever more sophisticated in their attempts to fool us, it’s important to know what to look out for.

We round up the latest advice and examples of phishing and fraud.

Text or WhatsApp messages

The number of fraudulent text messages has increased by more than a third in the past year. HMRC does send texts out in some situations, but never asks you for personal information.

A common approach is to claim you are due a tax refund, supplying a link. HMRC only sends links to information on the gov.uk website or to HMRC website.

Don’t click on any links unless you are certain they are legitimate, and if the link is to a form requesting information, close it down.

If you have subscribed to the UK Government Channel on WhatsApp, you might receive occasional tax-related reminders. These will be single messages and you will not be able to reply. HMRC will not communicate with you for any other reason using WhatsApp.

Send any suspicious messages to HMRC on 60599 (network charges apply).

Letters

HMRC recently shared an example of a misleading fraudulent letter that has been in circulation. A copy is below. The letter requests the recipient to email copies of recent bank statements, filed accounts, VAT returns and passport information.

It’s a convincing-looking letter – but one clue is a long and complicated email address. All genuine correspondence from HMRC should end in @hmrc.gov.uk.

QR codes

HMRC does use QR codes in letters and correspondence. The QR code will usually take you to guidance on the GOV.UK website – and if not, the letter will explain the destination for the code.

You will never be taken to a page to input personal information.

Send any suspicious emails or other materials containing QR codes to phishing@hmrc.gov.uk and delete them.

Emails

HMRC will never send notifications by email about tax rebates or refunds.

Don’t click on links in a ‘tax rebate’ email or open any attachments. Never disclose personal or payment information.

Fraudsters are good at making email addresses look genuine – but you can often detect suspicious details by clicking on the sender name. If you are unsure, forward it to HMRC’s phishing address and then delete it.

Phone calls

People are reporting an automated phone call scam that suggest HMRC is filing a lawsuit against you, asking you to press a button to speak to a caseworker and make a payment. You should end a phone call like this immediately.

Other scam calls may refer to National Insurance number fraud, or offer a tax refund, and ask you to provide bank or credit card information.

To help HMRC investigate, share any call details such as the date and phone number used via this online form.

Refund companies

Some companies send emails or texts offering to claim tax refunds or rebates on your behalf, usually for a fee. These companies are not connected with HMRC in any way. You should read the ‘small print’ and disclaimers before using their services.

What to look for

Although online criminals work very hard to make their scams appear real, there can often be a few tell-tale signs that things are not as they seem. Watch out for:

• Spelling errors and untidy formatting
• Email addresses that don’t look genuine
• Any form that requests financial information or personal details
• Strange website addresses that are not part of gov.uk

Helpful rules to follow

The Metropolitan Police suggests following these rules to prevent fraud:

• Be suspicious of all ‘too good to be true’ offers and deals.
• Don’t agree to an offer immediately. Insist on time to get independent or legal advice first.
• Don’t hand over money or sign anything until you’ve checked someone’s credentials and their company.
• Never send money to anyone you don’t know or trust, or use methods of payment you’re not comfortable with.
• Never give banking or personal details to anyone you don’t trust.
• Always log on to a website directly rather than clicking on links in an email.
• If you spot a scam or have been scammed, report it and get help.

What to do if you fall victim to a scam

If you think you’ve fallen victim to fraudsters, contact Action Fraud on 0300 123 2040 or at Action Fraud.

Remember that if you’re a victim of a scam or an attempted scam, however minor, there may be hundreds or thousands of others in a similar position. Your information may be vital in completing the picture.

Don’t be embarrassed – many people fall victim to online crimes each year because fraudsters are experts at deception.

For further advice on tax, tax refunds and staying safe as a taxpayer, we can help. Get in touch with our team today.