Brits are working out what the future holds for their money after the Labour party has presented its first budget in 14 years. Chancellor Rachel Reeves spelt out an array of plans in the House of Commons today that will affect us all.
Reeves said the government needed to raise funds to patch up a £22bn hole in the nation’s coffers they blame the Tories for. At the same time, she had vowed to protect working people.
This has seen a Budget that tweaks benefit and pension amounts, coupled with marked alterations to VAT charged on posh private schools. There are also bigger levies on sugary drinks, and the axing of non-dom super-rich tax perks.
The Chancellor said: “On July the 4th, the country voted for change. This Government was given a mandate: to restore stability to our country and to begin a decade of national renewal. To fix the foundations and deliver change through responsible leadership in the national interest. That is our task and I know we can achieve it.”
She added: “My belief in Britain burns brighter than ever and the prize on offer is immense. As the Prime Minister said on Monday, change must be felt: more pounds in people’s pockets, an NHS that is there when you need it, an economy that is growing, creating wealth and opportunity for all because that is the only way to improve living standards.”
She then said: “And the only way to drive economic growth is to invest, invest, invest. There are no shortcuts and to deliver that investment we must restore economic stability and turn the page on the last 14 years.”
Check out the timeline from our colleagues at the Manchester Evening News below for when you can anticipate the numerous changes announced today to be implemented.
Budget 2024 timeline
October 2024
- Increase in soft drinks industry levy to account for inflation and introduction of CPI duty each year going forward
- Employment Allowance to increase from £5,000 to £10,500
- Surcharge on second homes to rise to 5 per cent from October 31
- Renewal of tobacco duty escalator plus increase duty by 10 per cent on hand-rolling tobacco
November 2024
- Second-home buyers to see stamp duty land tax surcharge rise to 5 per cent
- New interest rate decision on November 7
January to December 2025
- An increase in the differential between fully electric and other vehicles in the first year rates of vehicle excise duty from April 2025
- Carried interest rate to increase to 32 per cent (this is the share of profits of an investment paid to the investment manager)
- Fuel Duty tax to be frozen for the next year
- Employer National Insurance Contribution to rise to 15 per cent from April 2025 alongside a threshold decrease at which it becomes payable to fall from £9,100 to £5,000
- An increase to Ministry of Defence budget of £2.9 billion in 2025
- Pension Credit increase of 4.1 per cent
- Alcohol duty rates on non-fraught products will increase in line with RPI from February 2025
- Additional funding for local government in 2025 including £1.3bn of additional grant for “essential services”
- National Minimum wage to increase in April 2025 to £12.21 per hour
- State Pension triple lock increase of 4.1 per cent in 2025
- Abolishment of non-dom regime from April 2025 to be replaced with a new residence scheme
- VAT on private school to be implemented alongside a removal of business rates relief from January 2025
- Business rates for retail, hospitality, and leisure at 40 per cent to continue into 2026 with a cap of £110,000 per business
- Renewal of tobacco duty escalator plus increase duty by 10 per cent on hand-rolling tobacco
- Employment Allowance to increase from £5,000 to £10,100
January to December 2026
- Flat rate duty introduction on all vaping liquid from October 2026
- Planned reform on agricultural property relief and business property relief – from April 2026, the first £1 million of combined business and agricultural assets to attract no inheritance tax