Chancellor Rachel Reeves has delivered Labour’s first Budget in almost 15 years, announcing a string of tax rises – “difficult decisions” designed to find billions to fix public finances.
Among the announcements delivered earlier today (Wednesday, October 30), was £40 billion in tax rises.
Picture credit: gov.uk
National Insurance contributions for employers (not employees) will increase by 1.2 percentage points to 15% from April 2025.
The point at which employers start paying NI will fall from £9,100 a year to £5,000 a year. This will raise £25bn per year.
The lower rate of Capital gains tax (CGT) on the sale of assets will increase from 10% to 18%. The higher rate will go from 18% to 24%. CGT on the sale of residential property will also increase from 18% to 24%.
Tax thresholds will rise, meaning the point at which people pay higher taxes will be increased. These tax bands had been frozen. But this freeze will end in 2028 and the bands will increase at the rate of inflation.
Health and employment services for people who are disabled and long-term sick will get £240m in funding.
The minimum wage for people 21 and over will rise by 6.7% to £12.21 an hour. This is the equivalent of £1,400 a year for a full-time worker. Workers aged 18 to 20 will see their minimum wage increase by 16.3% to £10 an hour.
People will now be able to earn £10,000 or more while claiming Carers Allowance. This will mean an extra £81.90 for those newly eligible.
The household support fund will receive £1bn to help those in financial hardship with the cost of essentials.
Ms Reeves pointed to difficult decisions, necessary because of a £22 billion black hole in public finances.
The chancellor began delivering her speech by saying she was “deeply proud” to be the first female chancellor.
Reeves criticised the Tories again for leaving in their wake a £22 billion black hole, saying “the scale and seriousness of the situation that we have inherited cannot be underestimated”, before later adding: “Never again will we allow a government to play fast and loose with the public finances.”
For a full account of the Autumn budget, visit: https://www.gov.uk/government/publications/autumn-budget-2024
