Chancellor Rachel Reeves has delivered Labour’s first Budget since 2010, after the party’s return to power in July’s general election.
Here are some key points to take away from the Autumn Budget.
Personal Tax and benefits
- The Minimum wage for adults over 21 is set to raise by 6.7% to £12.21 in April 2025 and the Minimum wage for 18-21 year olds will rise to £10.
- Income tax band thresholds to be unfrozen in 2028, preventing more people being dragged into higher tax bands as wages increase.
- Capital gains tax paid on profits from selling shares to increase from up to 20% to up to 24% – rates on additional property sales to remain same.
- Eligibility widened for the allowance paid to full-time carers, by increasing the maximum earnings threshold from £151 to £195 a week.
Business Tax
- The National Insurance paid by employers on workers’ wages will increase from 13.8% to 15%. The lower limit at which NI applies has dropped from £9,100 to £5000.
- 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.
- No inheritance tax due on combined business and agricultural assets worth less than £1m, above that there would be a 50% relief, at an effective rate of 20%, from April 2026.
- Retail, Hospitality and Leisure businesses will receive a 40% business rate relief.
- Tax on draught alcoholic drinks cut by 1.7%, however non-draught alcoholic drinks tax to increase by the higher RPI measure.
Funding
- Businesses will still receive tax benefits on the investment of electric vehicles.
- Increase funding for local social care.
- Investment of £22 billion for the NHS and Public Health sector.
- £6.7bn allocated for education investment next year, with £1.4bn earmarked for rebuilding over 500 schools.
- Affordable homes budget to be boosted by £500 Million
- £6.7bn allocated for education investment next year, with £1.4bn earmarked for rebuilding over 500 schools.
- Stamp duty on second home purchases in England and Northern Ireland to increase from 3% to 5%.
UK Inflation and Economic Growth
- 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