Rachel Reeves has revealed a £26 billion annual tax increase in a Budget that was leaked just before its official release. The Chancellor introduced 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, affecting over 1.5 million workers. The gambling industry will face new levies, while fuel duty will remain unchanged until the following year, as stated by Ms. Reeves.
During a lively session in the House of Commons, Ms. Reeves emphasized that these decisions were made in the best interest of creating a fairer, stronger, and more secure Britain. The Mirror now examines the key highlights from the long-awaited Budget announcement.
A new tax has been announced on properties exceeding £2 million, expected to impact between 100,000 and 200,000 homes, generating approximately £400 million annually for the Treasury. Additionally, a “high value council tax surcharge” for properties over £2 million was outlined in the Budget.
In a significant move, the Chancellor abolished the controversial two-child benefit limit, a policy criticized for exacerbating child poverty. The change is estimated to cost the Treasury £3 billion by 2029-30 but is anticipated to reduce child poverty by 450,000, according to OBR figures.
Furthermore, the Chancellor unveiled plans to raise £1.1 billion through reforms to gambling taxes, with an increase in remote gaming duty and the introduction of a new general betting duty for remote betting. These measures are projected to raise £1.1 billion by 2029-30.
Rail passengers are set to benefit from the first rail fare freeze in three decades, saving them an estimated £600 million in the upcoming year across more than a billion train journeys. Income tax thresholds will remain frozen for an additional two years until 2030, leading more individuals into higher tax brackets as their incomes rise.
Other notable announcements include a new mileage-based charge for electric and plug-in hybrid cars, a reduction in average household energy bills by £150, a boost in the state pension by around £550 per year, and pay increases for 2.7 million workers, among other initiatives.
The Budget also introduced changes to pensions, a widened tax on sugary drinks to combat obesity, and a new tax on overnight stays in accommodations, with funds allocated to local authorities. Additionally, investments in NHS technology and infrastructure projects like the Lower Thames Crossing were confirmed as part of the Budget plans.