gunnercooke experts react to the 2024 Budget and its impact 

In the Autumn Budget announced today to MPs in the House of Commons, Chancellor of the Exchequer, Rachel Reeves, laid out the government’s plans for the UK economy. Her statement presented changes to taxation and spending, from pensions to construction, the minimum wage, and a plan to regenerate public facilities. Set with the intention to reinvigorate the UK economy, how will the Budget impact individuals and businesses across sectors? 

gunnercooke’s Legal Partners and Operating Partners share their expert insights.  

Stuart Wilson, Construction, Engineering & Infrastructure Partner 

The budget will have a significant impact on the UK construction industry, with increased investments in several sectors. The housing plan offers £5 billion investment, but the key is delivery. The plans will need to demonstrate an improvement in the environment for affordable housing delivery and support local authorities that invest in their existing housing stock and new supply. 

Many buildings are awaiting critical cladding removal work. The £1 billion fund needs to be deployed to properly designed and buildable projects in short order. Over £2 billion is allocated for school maintenance and some of the £31 billion allocated for capital investment by the NHS should be allocated for large-scale refurbishment or new facilities. 

Investment in clean energy, with plans for 11 hydrogen projects and the establishment of GB Energy, should also increase project volume for UK construction. Support for the connection of HS2 to London Euston will be good news for infrastructure contractors, notwithstanding wider concerns about delivery. 

The £500 million fund for road maintenance is only a short-term solution to a serious problem that needs a longer-term investment strategy. 

Changes to tax policies will increase costs throughout the supply chain, which will be passed on to the end user. Increases to national insurance and a rise in the minimum wage rise could push up tender costs, although a freeze on fuel duty is of some comfort. 

Contact Stuart here. 

Helen Miles, Pensions Partner 

The Budget speech contained fewer changes for occupational and personal pension than might have been expected. 

Most significantly, she did not announce direct changes to the tax regime affecting matters such as pension contributions and the much-cherished tax-free lump sum. 

However, from 2027, it will no longer be possible to pass wealth from defined contribution and personal pensions outside of the inheritance tax regime when you die, in the same way as now. There are detailed provisions proposed to modify this for some spouse/partner arrangements which need to be considered, but this will likely affect the lifetime choices made by individuals planning how and when to access benefits from their pension “pots”. 

At gunnercooke we have an experienced Pensions team, advising many employers and pension scheme trustees of all sizes and types. The Budget has caused few immediate ripples in the pensions world, but that is to be welcomed as the industry already has a full caseload of actions and adaptations to manage. 

Contact Helen here. 

Sophie Thornley, Construction, Engineering & Infrastructure Partner: 

As expected, the “Rebuild Britain” budget included huge promises for investment in infrastructure, transport, clean energy and housebuilding. A swathe of cash has also been promised for repair and maintenance, recognising that infrastructure investment will drive jobs and growth. This is great news generally for the construction industry; all tiers of contractors and suppliers should benefit from opportunities available. 

However, construction firms run on tight margins, with the increases to minimum wages, business rates, corporation tax and NI to affect bottom lines in a fixed price lump sum market.  Material and labour shortages still create a challenging contracting environment. Hundreds more planning officers will be hired to ‘get Britain building’, however Rachel Reeves was silent as to how the government will address the skills gap. 

At gunnercooke we can assist clients and contractors to allocate risks in their construction contracts, helping parties to move forward in procuring and delivering works across the supply chain.” 

Contact Sophie here. 

Angelo Chirulli, Operating Partner: 

Today’s Budget announcement sees a significant rise in Capital Gains Tax (CGT), with the basic rate moving from 10% to 18% and the higher rate from 20% to 24%. This change directly impacts clients holding investments or assets like second homes, as it may reduce after-tax profits. 

For clients with diverse portfolios or those considering asset disposals in the near future, this shift underscores the need for strategic tax planning to manage CGT exposure effectively.  

With rates on residential property remaining at 18% and 24%, there is some continuity for property investors, yet the overall CGT rise may prompt reconsideration of asset holding periods. 

At gunnercooke, we advise clients to evaluate potential reliefs and the timing of disposals to adapt to this new landscape with minimal impact on long-term financial goals. This CGT increase highlights the importance of proactive, forward-looking tax planning. 

Contact Angelo here. 

Douglas Stratton, Operating Partner: 

Following on from the reforms announced by the last Government in the Spring Budget 2024, today the Chancellor announced that she will retain plans to abolish the ‘non-dom’ regime from April 2025. This will now be replaced by a new four-year residence-based regime, allowing new arrivals to the UK to claim relief on eligible foreign income and capital gains for up to four years. 

Individuals who have been taxed on the remittance basis in the past will be able to take advantage of the Temporary Repatriation Facility (TRF) which may allow them to remit previously untaxed income and gains to the UK at a tax rate of 12% (2025/26-2026/27) rising to 15% (2027/28). 

Foreign nationals living in, or coming to, the UK will no doubt need to examine the new regime in detail, and where relevant make plans regarding their tax affairs over the next few years to minimise the impact of these new rules. 

Contact Doug here. 

Jason Lewis, Real Estate Finance 

The budget highlighted the investment the government will put into the real estate industry. These include: 

• Investing more than £5billion to deliver their housing plan. 

• Increasing the Affordable Homes Programme to £3.1billion, provide £3billion worth of support and guarantees to increase the supply of homes and support small housebuilders.  

• Keeping CGT rates for residential property the same. 

• Lowering business rates relief for retail and hospitality to 40% with a cap at £110,000. 

It is difficult to know how the tax rises will affect the property market but clearly the Chancellor sees the budget as a Budget for investment and growth. One concern is that it appears that the OBR’s growth and inflation forecasts for the next couple of years are higher than most economists including the Bank of England expect and it seems that this Budget significantly boosts both. That may risk interest rates falling more slowly than currently forecast. 

Contact Jason here.  

Adam Bushby, Pension Parter: 

The changes to the inheritance tax treatment of pensions appear squarely focused on the use of pension funds as a way of passing on wealth intergenerationally. It’s important to note that the changes, at first blush, do not appear to affect adversely the ability to provide a pension benefit from one spouse’s pension pot to their spouse on death. This is because transfers between spouses and civil partners on death will still be exempt from inheritance tax. Transfers to anybody else will attract inheritance tax. If you take the view that pension scheme is there to provide pension benefits this appears to be a reasonable position to adopt. 

Contact Adam here. 

Neeraj Nagarkatti, Associate Operating Partner: 

The Autumn Budget 2024 offers opportunities and challenges for multinationals in the UK. A stable corporate tax rate is welcome, but rising Energy Profits Levy and OECD Pillar Two add complexities.  

Multinationals should assess impacts on UK and global tax planning. 

Key Highlights: 

• Corporate Tax: Capped at 25%, supporting stable long-term investments. 

• Employment Taxes: NICs up to 15% from 6 Apr 2025; Employment Allowance rises to £10,500.  

• Capital Allowances: Existing 100% allowances for zero-emission cars and EV charge points extended to 31 Mar 2026. 

• R&D: Existing R&D tax credits retained, with £20.4 billion funding for 2025-26 underscoring a commitment to tax reliefs. 

• OECD Pillar II: Undertaxed Profits Rule (UTPR) starts 31 Dec 2024, aligning with global standards and affecting groups with low foreign tax rates. 

• Transfer Pricing: Spring 2025 consultation on modernising Transfer Pricing, Permanent Establishments (PEs), and Diverted Profits Tax (DPT), with lower exemption thresholds and expanded cross-border disclosures. 

• Energy Profits Levy (EPL): Rises from 35% to 38% on 1 Nov 2024, with investment allowance removed; ends by 2030. 

• Business Rates: Reduced multipliers for retail, hospitality, leisure from 2026-27, offset by higher rates on properties over £500,000. 

• Capital Gains Tax (CGT): Rates rise to 18% and 24% from 30 Oct 2024; full increases by 6 Apr 2026. BADR and IR rates reach 14% by 6 Apr 2025, then 18% by 6 Apr 2026. 

• Carried Interest: Relevant to private equity, CGT on carried interest rises to 32% from 6 Apr 2025, transitioning to Income Tax by 6 Apr 2026.” 

Contact Neeraj here. 

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