Rachel Reeves has introduced tax increases amounting to £26 billion annually in a Budget that was leaked just before its official release.
The Chancellor revealed a new mansion tax for properties valued over £2 million and confirmed the removal of the two-child benefit limit, a move long advocated by anti-poverty activists.
In a contentious decision, income tax thresholds will be frozen, impacting over 1.5 million workers. Additionally, the gambling industry will face new levies, while fuel duty will remain unchanged until the following year, as stated by Ms. Reeves.
Addressing the rowdy House of Commons, Ms. Reeves stated, “These are my choices. The right choices for a fairer, stronger, and more secure Britain.”
The Mirror examines the key points from the highly anticipated Budget announcement by the Chancellor.
As part of the Budget, a new tax will be imposed on homes surpassing £2 million, affecting approximately 100,000 to 200,000 properties. This levy is expected to generate around £400 million annually for the Treasury.
The Budget also includes a “high value council tax surcharge” on properties valued above £2 million, with varying charges based on property value bands.
In a significant move, the Chancellor scrapped the controversial two-child benefit limit, which has been criticized for exacerbating child poverty. The removal of this policy is estimated to cost the Treasury around £3 billion by 2029-30 but is predicted to alleviate child poverty for 450,000 children.
Labour MPs, along with former Prime Minister Gordon Brown, had long urged Keir Starmer and his team to abolish the two-child benefit limit, which had caused internal party tensions previously. The Chancellor also announced that benefits will be adjusted for inflation starting in April.
Reforms to gambling taxes were unveiled, aiming to raise £1.1 billion by 2029-30. This includes an increase in remote gaming duty and the introduction of a new general betting duty for remote betting, with certain exclusions.
Rail passengers will benefit from the first rail fare freeze in three decades, saving an estimated £600 million in the upcoming year. This decision was welcomed by Transport Secretary Heidi Alexander, emphasizing the public’s frustration with previous rail fare increases.
Income tax thresholds will remain frozen for an additional two years until 2030, potentially pushing more individuals into higher tax brackets as their incomes rise.
A new mileage-based charge on electric and plug-in hybrid cars will be implemented from April 2028, expected to raise £1.4 billion for the Treasury.
Households can anticipate a £150 reduction in energy bills starting in April, following the scrapping of the ineffective ECO scheme. This move aims to fulfill the promise of reducing energy costs for families.
Pensioners will receive a boost of approximately £550 per year through an increase in the state pension from April. The state pension will rise in line with average earnings growth, with the current rate expected to exceed £240 per week from April.
Furthermore, the Budget includes measures to raise funds through national insurance contributions on salary-sacrificed pensions, which is projected to generate £4.7 billion annually.
To combat obesity and promote children’s health, the tax on sugary drinks will be expanded by lowering the threshold for the Soft Drinks Industry Levy. Manufacturers will need to reduce sugar content in their beverages to avoid the new charge.
A reduction in the annual cash ISA limit to £12,000 from April 2027 was confirmed by the Chancellor, affecting younger savers, while over-65s retain a £20,000 annual savings limit.
A new tax on overnight stays in accommodations, including Airbnbs, will be introduced to fund regional initiatives.
Ms. Reeves pledged a £300 million investment in NHS technology, aiming to enhance patient services and establish new health centers within communities.
Funding for the Lower Thames Crossing and various transport infrastructure projects was also confirmed by the Chancellor to boost regional development.
The Budget announcement includes a rise in the National Living Wage and adjustments to national insurance contributions, showcasing the Government’s economic plans for the future.