Chancellor Rachel Reeves has delivered Labour’s first Budget since 2010, after the party’s return to power in July’s general election.
We wanted to provide you with a summary of the most notable points that were made in yesterday’s speech.
Personal taxes
- Freeze on income tax and National Insurance thresholds to end in 2028, preventing people from being dragged into higher tax bands as their wages rise
- Capital gains tax paid on profits from selling shares to increase from up to 20% to up to 24% – rates on additional property sales to stay same
- Freeze on inheritance tax thresholds extended beyond 2028 to 2030
Housing
- Social housing providers to be allowed to increase rents above inflation under multi-year settlement
- Discounts for social housing tenants buying their property under the Right to Buy scheme to be reduced
- Stamp duty surcharge, paid on second home purchases in England and Northern Ireland, to go up from 3% to 5%
- Point at which house buyers start paying stamp duty on a main home to drop from £250,000 to £125,000 in April, reversing a previous tax cut
- Threshold at which first-time buyers pay the tax will also drop back, from £425,000 to £300,000
- Current affordable homes budget, which runs until 2026, boosted by £500m
Transport, alcohol, tobacco
- £2 cap on single bus fares in England to rise to £3 from January
- 5p cut to fuel duty on petrol and diesel, due to end in April 2025, kept for another year
- Commitment to fund tunnelling work to take HS2 high-speed rail line to Euston station in central London
- Commitment to deliver upgrade to trans-Pennine rail line between York and Manchester, running via Leeds and Huddersfield
- Air Passenger Duty on flights by private jet to go up by 50%
- Tax on tobacco to increase by 2% above inflation, and 10% above inflation for hand-rolling tobacco
- Tax on non-draught alcoholic drinks to increase by the higher RPI measure of inflation, but tax on draught drinks cut by 1.7%
Wages, benefits and pensions
- Legal minimum wage for over-21s to rise from £11.44 to £12.21 per hour from April
- Rate for 18 to 20-year-olds to go up from £8.60 to £10, as part of a long-term plan to move towards a “single adult rate”
- Eligibility widened for the allowance paid to full-time carers, by increasing the maximum earnings threshold from £151 to £195 a week
Business taxes
- Firms to pay National Insurance on workers’ earnings above £5,000 from April, down from £9,100 currently, with the rate increasing from 13.8% to 15%
- Employment allowance – which allows companies to reduce their NI liability – to increase from £5,000 to £10,500
- Tax paid by private equity managers on share of profits from successful deals to rise from up to 28% to up to 32% from April
- Main rate of corporation tax, paid by businesses on taxable profits over £250,000, to stay at 25% until next election
UK debt, inflation and economic growth
- Office for Budget Responsibility predicts the UK economy will grow by 1.1% this year, 2% next year, and 1.8% in 2026
- Inflation predicted to average 2.5% this year, 2.6% next year, before falling to 2.3% in 2026
- Official definition of UK government debt loosened by including a wider range of financial assets, such as future student loan repayments
Government spending and public services
- Extra £22.6bn for day-to-day spending on the NHS in England, and a £3.1bn boost to budget for investment
- £6.7bn allocated for education investment next year, with £1.4bn earmarked for rebuilding over 500 schools
Source
BBC News (2024) Budget 2024: Key points at-a-glance. Available at: https://www.bbc.co.uk/news/articles/cdxl1zd07l1o [Accessed 30th October 2024]
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