Rachel Reeves has announced a yearly tax increase of £26 billion in a Budget that was leaked just before its official release. The Chancellor revealed a new mansion tax for homes valued over £2 million and confirmed the removal of the 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 frozen until the following year.
Addressing the House of Commons, Ms. Reeves stated, “These are my decisions. The right decisions for a fairer, stronger, and more secure Britain.” The Mirror provides an overview of key highlights from the Chancellor’s anticipated Budget.
A new tax on homes exceeding £2 million is anticipated to impact between 100,000 and 200,000 properties, generating approximately £400 million annually for the Treasury. The Budget also introduces a “high value council tax surcharge” for properties valued above £2 million.
The Chancellor abolished the controversial two-child benefit limit, a policy criticized for exacerbating child poverty. Labour MPs and former Prime Minister Gordon Brown had long advocated for this change. Additionally, benefits will be adjusted in line with inflation starting in April.
To enhance revenue, the Chancellor proposed reforms in gambling taxes, estimating a £1.1 billion increase by 2029-30. Rail fares will be frozen for the first time in three decades, benefiting over a billion train passengers. Income tax thresholds will be frozen until 2030, affecting more individuals as their earnings rise.
Furthermore, a new mileage-based charge on electric and plug-in hybrid cars will be implemented in 2028, expected to raise £1.4 billion for the Treasury. A £150 reduction in average household energy bills is planned, along with a boost in the state pension for pensioners.
The Budget also includes pay raises for around 2.7 million workers, with the National Living Wage increasing to £12.71 per hour for individuals over 21. Additionally, national insurance contributions on salary-sacrificed pensions will be imposed, generating £4.7 billion annually.
Other measures announced include a broader tax on sugary drinks, a cut in the cash ISA limit for younger savers, a charge on overnight stays in accommodation, and investments in NHS technology. Funding for the Lower Thames Crossing and various transport projects was also confirmed to boost infrastructure development.