Autumn budget 2024: what it means for solicitors and clients

We outline some of the biggest changes and what they might mean for you and your clients.

Justice budget

The Ministry of Justice’s budget is set to rise by a total of £1.9 billion over the next two years – a 5.6% real terms increase to 2025/26.

Much of this new money has been set aside for investment in prisons and probation, including £2.3 billion of investment in prison expansion over 2024/25 and 2025/26 to combat immediate pressures on the system and stave off the need for further rounds of early releases.

A minimum £500 million of additional investment has also been announced across prisons and probation in 2025/26 to recruit thousands of new prison and probation staff.

No mention has been made of funding for courts, legal aid or the wider justice system, but not all of the new money allocated to the MoJ has been ringfenced for specific projects.

The justice secretary will therefore have a decision to make about how to spend this money.

We are urging the justice secretary to make sure investment in the justice system is top of her list of priorities.

Find out more about our key asks for the autumn budget

Business rates relief

The UK government announced transformation of business rates in England to deliver a fairer system that “better incentivises investment and protects high street businesses”.

This ambition will be achieved through introducing permanently lower business rates multipliers for high street retail, hospitality and leisure properties from 2026/27.

The UK government is also freezing the small business multiplier for 2025/26, meaning if your property has a rateable value below £51,000, your bill will be calculated at a lower rate declining with value.

To make sure this tax cut is fiscally sustainable, the UK government intends to fund it through a higher multiplier for the most valuable properties.

Employer national insurance

The UK government is increasing employer national insurance by 1.2 percentage points to 15% from April 2025.

It is also reducing the secondary threshold where employers start paying national insurance from £9,100 to £5,000.

To balance this increase for small and medium-sized enterprises, the government is increasing employment allowance relief from £5,000 to £10,500.

The current employment allowance gives employers with national insurance contribution bills of £100,000 or less a discount of £5,000 on their employer national insurance contribution bill.

Reeves stated that, because of this move, 865,000 employers won’t pay any national insurance next year and 1 million employers will pay the same or less than last year.

Public sector efficiency targets

In her budget announcement, the chancellor formally launched the Office for Value for Money.

Initially, this institution will:

• conduct an assessment of where and how waste and inefficiency in public services could be mitigated
• assess value for money in high-risk areas of cross-departmental spending

The government has also set all departments a 2% productivity, efficiency and savings target for next year.

Capital gains tax

The chancellor confirmed an expected rise in capital gains tax. The government will increase the lower rate from 10% to 18% and higher rate from 20% to 24%.

The rates for residential property will, however, remain at their current levels.

Reeves explained that, despite this change, the UK still has lowest levels of capital gains tax amongst European G7 countries.

To balance this measure and encourage investment, the chancellor has also maintained the lifetime limit for business asset disposal relief at £1 million.

Relief will remain at 10% this year, 14% next year and 18% from 2026/27.

The government is also reforming the tax rules relating to carried interest. This performance-related reward is received by small number of fund management executives.

Unlike other forms of compensation, carried interest can be taxed through capital gains tax when certain conditions are met.

From April 2026, the government is reforming this area to make a majority of cases subject to income tax.

Additional funding for devolved governments

The devolved governments are receiving an additional £6.6 billion through the operation of the Barnett formula in 2025/26. This includes £1.7 billion for the Welsh government.

The total budget for Wales will increase by 1.3% in real terms to £21 billion in the same period.

The budget also notes that a “needs-based factor of 5% for the Welsh government” has been applied to the Barnett formula for 2025/26.

According to the budget documents, this ensures that the Welsh government is funded above its independently assessed relative need.