Industry Update: UK Government Autumn Budget 2024 – Scotland Office Summary
Following the delivery of the UK Government’s Autumn Budget 2024 today (Wednesday 30th October), the Scotland Office has shared the below summary of announcements relevant to Scotland:
-A record £47.7 billion for the Scottish Government in 2025/26 – the largest settlement in real terms in the history of devolution. This includes a £3.4 billion top-up through Barnett in 2025-26, with £2.8 billion for day-to-day spending and £610 million for capital investment.
-The Chancellor committed the UK Government to work closely with the Scottish Government on the Industrial Strategy, 10-year infrastructure strategy and the National Wealth Fund – to ensure the benefits of these are felt UK-wide. These will mobilise billions of pounds of investment in the UK’s world-leading clean energy and growth industries.
-£125 million next year to set up Great British Energy at its new home in Aberdeen – helping to develop new clean energy projects in Scotland and across the UK.
-Funding for City and Growth Deals, including the continuation of its contribution to the Argyll and Bute Growth Deal which delivers £25 million of investment in the region over 10 years.
-The UK Shared Prosperity Fund will continue at a reduced level for a further year with £900 million of funding UK wide. This transitional arrangement will provide as much stability as possible in advance of wider local growth funding reforms.
-Confirmed funding for the Investment Zones and Freeports programmes across the UK – including Scotland’s Green Freeports.
-£750,000 for the Scotland Office in 2025/26 to champion Brand Scotland.
-Under-served parts of Scotland, including Highlands and Islands, will benefit from the rollout of digital infrastructure enabled by over £500 million of UK-wide investment in Project Gigabit and the Shared Rural Network.
-UK Government revenue support for two electrolytic hydrogen projects through the first Hydrogen Allocation Round: Cromarty Green Hydrogen Project and Whitelee Green Hydrogen. Both projects will bring in significant international investment and create good quality, local jobs.
-An extension of the Innovation Accelerators programme will support the high-potential innovation cluster in the Glasgow City Region.
-A corporate tax roadmap to provide businesses with the stability and certainty they need to make long-term investment decisions and support our growth mission. It confirms our competitive offer, with the lowest Corporate Tax rate in the G7 and generous support for investment and innovation.
-Implementation of 45%/40% rates of theatre, orchestra, museum and galleries tax relief from 1 April 2025 to provide certainty to businesses in Scotland’s thriving cultural sector. This tax relief package is worth more than £1 billion over the next 10 years to UK creative industries.
-The rate of Employers’ National Insurance will increase by 1.2 percentage points, to 15%. The Secondary Threshold – the level at which employers start paying national insurance on each employee’s salary – will reduce from £9,100 per year to £5,000 per year.
-The smallest businesses will be protected as the Employment Allowance will increase to £10,500 from £5,000, allowing firms in Scotland to employ four National Living Wage workers full time without paying national insurance on their wages.
-Capital Gains Tax will increase from 10% to 18% for those paying the lower rate, and 20% to 24% for those paying the higher rate.
-From April 2026, agricultural property relief and business property relief will be reformed. The highest rate of relief will continue at 100% for the first £1 million of combined business and agricultural assets, fully protecting the majority of businesses and farms.
-From 2026-27 Air Passenger Duty (APD) for short and long-haul flights will increase by 13% to the nearest pound, a partial adjustment to account for previous high inflation.
-The UK Government will also uprate alcohol duty in line with RPI on 1 February 2025, except for most drinks in pubs. To support pubs and smaller brewers in Scotland, the UK Government is cutting duty on qualifying draught products by 1p, which represent approximately 3 in 5 alcoholic drinks sold in pubs. This measure reduces duty bills by over £70 million a year, cutting duty on an average strength pint in a pub by a penny. The relief available to small producers will be updated to help smaller brewers and cidermakers. We will continue or expand existing support for Scotch Whisky by providing £3-5 million for HMRC to reduce the fees charged by the Spirit Drinks Verification Scheme and by ending mandatory duty stamps for spirits on 1 May 2025.
-The government is asking oil and gas companies to pay more to support the energy transition. The Energy Profits Levy measures announced in the manifesto and July Statement remain but the decarbonisation allowance has been retained and to provide certainty and to support a stable energy transition, the government will make no additional changes to tax relief available within EPL.
The Budget can be found here.
The Corporate Tax roadmap here.
