Current tax rules for non-UK domiciled individuals will end on 6 April, replaced by a system based on tax residence. Employers’ national insurance contributions (NIC) go up by 1.2% to 15% from April, and the threshold will be reduced from £9,100 to £5,000, raising £25bn per year. However, 865,000 small employers will not pay any NICs at all as the allowance is rising from £5,000 to £10,500.
Nicky Owen, head of professional practices, Crowe UK, said: ‘One upshot of the increase in employers’ NICs is that LLP structures have instantly become more attractive. Professional practice firms may want to relook at their salaried partners and consider whether it is time to promote them to fully fledged partners.’
Reeves gave an extra £5bn for housebuilding. Stamp duty land tax for second homes rises from 3% to 5%. Jonathan Achampong, head of residential property, Howard Kennedy, said the increase ‘has come as a bit of a surprise to the residential property market and will, no doubt, lead to some frantic activity to get deals over the line this evening.
‘Over the coming days and weeks, potential buyers and investors are likely to seek to renegotiate purchase prices to factor in this additional cost, and we may also see some downward pressure exerted on sale prices over the coming months.’
Reeves vowed to ‘invest, invest, invest’ and promised ‘no return to austerity’, with an extra £5bn for 1.5 million new homes, £6.7bn for education and £22.6bn (daily spend) and £3.1bn (capital) for the NHS.
The Ministry of Justice budget rises 5.6% to £13.8bn in 2025-26, with funding for the Law Officers’ Department, which finances criminal prosecution services, rising 7.5% to £1.1bn.
Sam Townend KC, chair of the Bar Council, welcomed the ‘much-needed real terms increases’ but said justice would need ‘sustained funding through next spring’s spending review to move away from crisis mode’.
