Rachel Reeves has revealed a £26 billion annual tax increase in a budget that was leaked just before its official release. The Chancellor introduced a new mansion tax targeting properties valued over £2 million and announced the removal of the controversial two-child benefit limit. Additionally, income tax thresholds will be frozen, impacting over 1.5 million workers, while the gambling industry will face new levies. Fuel duty will remain unchanged until the following year.
Addressing the House of Commons, Reeves stated, “These are my decisions, the right ones for a fairer, stronger, and more secure Britain.” The Mirror delves into the crucial aspects of the long-awaited budget.
A new tax on homes exceeding £2 million is anticipated to impact 100,000 to 200,000 properties, generating approximately £400 million annually. The budget includes a high-value council tax surcharge on properties over £2 million, set to commence in April 2028.
The Chancellor abolished the two-child benefit limit, a move long advocated by anti-poverty campaigners. The OBR estimates this change will cost £3 billion by 2029-30 but is projected to decrease child poverty by 450,000. Moreover, the budget outlines an increase in gambling taxes, with reforms expected to raise £1.1 billion by 2029-30.
Rail passengers can anticipate the first fare freeze in 30 years, saving them £600 million in the upcoming fiscal year. Income tax thresholds will be frozen until 2030, leading to more individuals entering higher tax brackets as their earnings rise. The budget also introduces a mileage-based charge for electric and plug-in hybrid vehicles from April 2028.
Households are set to benefit from a £150 reduction in energy bills starting in April. Pensioners will receive an annual boost of around £550 as the state pension rises next year. The budget also includes pay increases for 2.7 million workers, with the National Living Wage set to rise to £12.71 per hour for employees above 21 years old.
Furthermore, national insurance contributions will now apply to salary-sacrificed pension contributions, estimated to raise £4.7 billion yearly. The tax on sugary drinks will be expanded to combat obesity, and a new levy on overnight stays in accommodations is announced.
Reeves pledged £300 million for NHS technology and the establishment of 250 new neighborhood health centers. Additionally, funding for the Lower Thames Crossing and other transport infrastructure projects was confirmed. The Chancellor affirmed her commitment to revitalizing the NHS and investing in vital transport links for the nation’s growth.