What can we expect from the new government's first budget?

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On 29 July the Chancellor Rachel Reeves revealed the first budget will take place on 30 October 2024.

In her speech she painted a grim picture of the country’s finances so what can we expect from the budget?


  • Personal Taxes - the Labour party manifesto pledged not to raise the Income tax and National Insurance rates so we shouldnt see any changes there but Capital Gains tax rates and Inheritance tax could be targeted with Capital Gains tax rates being lower than Income tax in most cases.


  • Business taxes - Labour pledged that they would not increase Corporation tax rates above 25% for the term of their government so it's possible we could see a change to the small companies rate of 19%.  The business rates system may also see an overhaul.


  • VAT - Again there was a pledge not to increase VAT rates, but see below for the changes on private school fees. 


  • Pensions have been in the spotlight with a new Pension Schemes Bill mentioned in the King's speech  so we may see some changes to the rules on how pensions are taxed.



What we already know


  • The much publicised addition of Vat to private school fees will go ahead - draft legislation has been issued for this to start on 1 January 2025 with anti avoidance rules to stop forward paying of fees between now and then. The intention is that nurseries will remain exempt and before and after school clubs and holiday clubs which are childcare based (not education based) will remain exempt 


  • Furnished holidays lets - The previous government announced that the favourable tax treatment of holiday lettings was to be abolished from 6 April 2025 - this will remain with draft proposals of the changes now being released.


  • Non-domiciled individuals - The previous governments plans to remove the domicile concept from the tax system and move to a residence based system for offshore income and gains will remain and start from 6 April 2025.


  • Winter fuel payments are abolished for all pensioners except those receiving pension credits and means tested benefits.


  • The new government want to tackle the “Tax gap” and have promised to invest in HMRC capacity to improve service levels and address non-compliance so we can expect to see an increase in HMRC activity in these areas