A ‘Spring Forecast’ will take place on 26 March 2025, but without any major tax policy updates.
Budget 2024 key points
Introduced in the Budget Responsibility and National Audit Act 2011, the Office for Budget Responsibility (OBR) is required to produce two forecasts each financial year, with 26 March next on the list.
This ‘Economic and Fiscal Forecast’ will be accompanied by a statement to Parliament by chancellor Rachel Reeves. However, the statement will avoid introducing any new tax policy. “The chancellor remains committed to one major fiscal event a year to give families and businesses stability and certainty on upcoming tax and spending changes and, in turn, to support the government’s growth mission,” said an HM Treasury statement.
Trade bodies baulk at IHT changes
Details of the forecast came as pressure was put on the Treasury after 32 trade bodies signed a letter warning the chancellor that planned inheritance tax changes around business property relief (BPR) and agricultural property relief (APR) would not only impact the farm owners, but risk a further 125,000 jobs being lost. The Builders Merchant Federation is the latest signatory to the letter.
The letter, led by Family Business UK, states: “If the purpose of this policy change is to incentivise investment, support growth, and fill a fiscal shortfall in the public finances, these changes will not deliver that.
“BPR and APR are not loopholes. They exist for a purpose. Introduced by Labour in 1976, they allow profitable businesses to continue trading, without penalty, when the owner dies.”
Tory leader Kemi Badenoch addressed a protest event soon after the letter’s publication. “It is absolutely essential that we go back to how things were,” Badenoch said, according to The Independent.
GDP stalls to increase government woes
Further pressure to row back on increased National Insurance hikes has followed another decline in UK GDP, falling 0.1% month on month in October – the second consecutive fall.
“These latest figures will send a chill through the corridors of Westminster, as the Government’s growth agenda looks increasingly at risk and almost certainly opens the door to the possibility of one final rate cut before the year is out,” said Wealth Club investment manager Isaac Stell.
“With more and more companies stating they will cut back on hiring and investment to deal with the rising costs related to the Budget, the question will be, where will growth actually come from?”
Budget 2024 key points
The increase in Employers’ NICs announced in the Budget, up 1.2 percentage points to 15% from April 2025 – alongside the salary threshold fall to £5,000 from £9,100, was described as a “major blow for most businesses” by Institute of Directors policy director Roger Barker. It was alleviated with an increase in the employment allowance to £10,500 from £5,000.
The lower rate of CGT will rise to 18%, from 10%, and the higher CGT rate will rise to 24% from 20% – taking these to the same CGT rates as for residential property disposals, which remain unchanged. With individual savings accounts (ISAs) remaining unchanged, some commentators said the CGT rate rises highlighted the continuing importance of using ISAs to shelter from tax.
The CGT rate applying to Business Asset Disposal Relief and Investors’ Relief will increase to 14% for disposals made on or after 6 April 2025, and to 18% for disposals made on or after 6 April 2026. For disposals made on or after 30 October 2024, the lifetime limit for share disposals qualifying for Investors’ Relief fell to £1m from £10m – and the main CGT rate applying to trustees and personal representatives rose to 24% from 20%.
More information on the IFA Tax Series 2025 here.
