Chancellor Rachel Reeves has delivered Labour’s first Budget since 2010, after the party’s return to power in July’s general election.
She announced tax rises worth £40bn, which she argued would rebuild public services and stabilise the public finances.
Here is a summary of the main measures.
- Rates of income tax and National Insurance (NI) paid by employees, and of VAT, to remain unchanged
- Income tax band thresholds to rise in line with inflation after 2028, preventing more people being dragged into higher bands as wages rise
- Basic rate capital gains tax on profits from selling shares to increase from from 10% to 18%, with the higher rate rising from 20% to 24%
- Rates on profits from selling additional property unchanged
- Inheritance tax threshold freeze extended by further two years to 2030, with unspent pension pots also subject to the tax from 2027
- Exemptions when inheriting farmland to be made less generous from 2026
- Companies to pay NI at 15% on salaries above £5,000 from April, up from 13.8% on salaries above £9,100, raising an additional £25bn a year
- Employment allowance – which allows smaller companies to reduce their NI liability – to increase from £5,000 to £10,500
- Tax paid by private equity managers on share of profits from successful deals to rise from up to 28% to up to 32% from April
- Main rate of corporation tax, paid by businesses on taxable profits over £250,000, to stay at 25% until next election
- 5p cut in fuel duty on petrol and diesel brought in by the Conservatives, due to end in April 2025, kept for another year
- £2 cap on single bus fares in England to rise to £3 from January
- Commitment to fund tunnelling work to take HS2 high-speed rail line to Euston station in central London
- Commitment to deliver upgrade to trans-Pennine rail line between York and Manchester, running via Leeds and Huddersfield
- Air Passenger Duty on flights by private jet to go up by 50%
- New tax of £2.20 per 10ml of vaping liquid introduced from October 2026
- Tax on tobacco to increase by 2% above inflation, and 10% above inflation for hand-rolling tobacco
- Tax on non-draught alcoholic drinks to increase by the higher RPI measure of inflation, but tax on draught drinks cut by 1.7%
- Government to review thresholds for sugar tax on soft drinks, and consider extending it to “milk-based” beverages
- Legal minimum wage for over-21s to rise from £11.44 to £12.21 per hour from April
- Rate for 18 to 20-year-olds to go up from £8.60 to £10, as part of a long-term plan to move towards a “single adult rate”
- Basic and new state pension payments to go up by 4.1% next year due to the “triple lock”, more than working age benefits
- Eligibility widened for the allowance paid to full-time carers, by increasing the maximum earnings threshold from £151 to £195 a week
- Current affordable homes budget, which runs until 2026, boosted by £500m
- Social housing providers to be allowed to increase rents above inflation under multi-year settlement
- Stamp duty surcharge, paid on second home purchases in England and Northern Ireland, to go up from 3% to 5%
- Office for Budget Responsibility predicts the UK economy will grow by 1.1% this year, 2% next year, and 1.8% in 2026
- Inflation predicted to average 2.5% this year, 2.6% next year, before falling to 2.3% in 2026
- Official definition of UK government debt loosened by including a wider range of financial assets, such as future student loan repayments
- Extra £22.6bn for day-to-day spending on the NHS in England, and a £3.1bn boost to budget for investment
- £6.7bn allocated for education investment next year, with £1.4bn earmarked for rebuilding over 500 schools
- Defence spending to rise by £2.9bn next year
- £11.8bn allocated to compensate victims of the infected blood scandal, with £1.8bn set aside for wrongly prosecuted Post Office sub-postmasters
- Government to stop receiving surplus cash from pension scheme for mineworkers
- An extra £6.6bn for the devolved nations – £3.4bn for Scotland, £1.7 billion for Wales and £1.5bn for Northern Ireland
