Rachel Reeves has revealed a yearly tax increase of £26 billion 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 confirmed the removal of the two-child benefit limit. Additionally, income tax thresholds will be frozen, affecting over 1.5 million workers. The gambling sector will face new levies, while fuel duty remains unchanged until next year, according to Ms. Reeves.
Addressing the House of Commons, Ms. Reeves stated, “These are my decisions, the right ones for a fairer, stronger, and more secure Britain.” The Mirror examines the key highlights of the long-awaited Budget presented by the Chancellor.
A new tax on homes exceeding £2 million was announced, affecting an estimated 100,000 to 200,000 properties and projected to generate approximately £400 million yearly for the Treasury. The Budget also includes a “high value council tax surcharge” for properties over £2 million.
The Chancellor abolished the controversial two-child benefit limit, a move expected to cost the Treasury £3 billion by 2029-30 but estimated to reduce child poverty by 450,000. Moreover, benefits will increase in line with inflation starting in April.
Further measures introduced include a reform in gambling taxes to raise £1.1 billion, a rail fare freeze, and the freezing of income tax thresholds until 2030. A new mileage-based charge on electric cars will be implemented in 2028, aiming to raise £1.4 billion. Additionally, an average household is set to benefit from a £150 reduction in energy bills from April.
Pensioners will receive a £550 boost annually as the state pension rises from April. The National Living Wage will increase to £12.71 per hour for workers over 21, benefiting around 2.4 million low-paid workers. National insurance contributions on salary-sacrificed pensions will be imposed, expected to raise £4.7 billion annually.
To combat obesity, a wider tax on sugary drinks will be enforced from January 2028. The annual cash ISA limit will be reduced to £12,000 from April 2027 for younger savers. Moreover, a tax on overnight stays in accommodations is anticipated to raise prices by £2 a night.
Ms. Reeves pledged £300 million for NHS technology and infrastructure, emphasizing the Labour Party’s commitment to revitalizing the healthcare system. Funding for projects like the Lower Thames Crossing and various transport developments was also confirmed by the Chancellor.