Rachel Reeves has introduced a £26 billion annual tax increase in a Budget that was leaked just before its official release. The Chancellor revealed a new mansion tax affecting properties 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 unchanged until the following year.
Addressing the rowdy House of Commons, Ms. Reeves stated, “These are my decisions, the right choices for a fairer, stronger, and more secure Britain.” The Mirror examines the key points from the long-awaited Budget announcement.
The Budget outlines a new tax on homes exceeding £2 million, estimated to affect 100,000 to 200,000 properties. The tax, ranging from £2,500 to £7,500 annually, is projected to generate approximately £400 million for the Treasury each year.
Furthermore, the Budget introduces a “high value council tax surcharge” on properties valued over £2 million, with varying charges based on property value bands. In another significant move, the Chancellor scrapped the controversial two-child benefit limit, anticipated to cost the Treasury £3 billion by 2029-30 but estimated to reduce child poverty by 450,000.
Moreover, Labour MPs and former Prime Minister Gordon Brown had been advocating for the removal of the two-child benefit limit. Additionally, benefits will be adjusted in line with inflation from April. The Chancellor also announced plans to raise £1.1 billion through gambling tax reforms, including an increase in remote gaming duty and other related measures.
The Budget includes the first rail fare freeze in three decades, benefiting existing rail passengers with an expected savings of £600 million in the upcoming fiscal year. Income tax thresholds will be frozen for an additional two years, leading to more individuals moving into higher tax brackets as their incomes rise.
Additionally, a new mileage-based charge on electric and plug-in hybrid cars is set to commence in 2028, aiming to raise £1.4 billion for the Treasury. A £150 reduction in average household energy bills is also planned, with adjustments to existing energy schemes to achieve savings for families.
Pensioners are set to receive a boost of around £550 annually as the state pension rises from April next year. The Budget also includes measures such as pay hikes for workers, changes to national insurance contributions on pension schemes, and widening the tax on sugary drinks to tackle obesity.
Furthermore, adjustments to cash ISA limits and the introduction of a new tax on overnight stays in accommodations have been outlined. Investments in the NHS technology and infrastructure, as well as funding for key transportation projects like the Lower Thames Crossing, were also confirmed in the Budget.