Rachel Reeves has today delivered her Budget, setting out a range of tax, welfare and economic measures that will affect individuals, businesses, and investors across the UK. Please find below our breakdown of the main points announced.
Taxation and Personal Finance
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National Insurance and income tax thresholds will remain frozen for a further three years beyond 2028.
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Cash ISA contributions for under-65s will be capped at £12,000 per year from April 2027, with the remainder of the existing £20,000 allowance available only for investment ISAs.
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The two-child benefit cap will be removed from April 2026.
- Infected blood compensation payments will be exempt from inheritance tax.
Property and Wealth
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A new annual property surcharge, referred to as a mansion tax, will apply to high-value homes.
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Properties valued above £2 million will pay £2,500 per year.
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Properties valued above £5 million will pay £7,500 per year.
Pensions and Investment
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From 2029, the tax advantages available through pension salary sacrifice will be limited.
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Only the first £2,000 of salary-sacrificed contributions each year will retain National Insurance benefits.
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Contributions above this amount will be taxed in the same way as standard pension contributions.
Business and Economy
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The Chancellor intends to more than double fiscal headroom to £21.7 billion.
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The OBR has revised its productivity growth forecast down to one per cent.
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Apprenticeship training for under-25s will be made free for small and medium-sized enterprises.
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Additional funding will be provided to devolved governments, with further decision-making powers passed to regional leaders.
Transport, Levies and Public Spending
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A new mileage-based charge for electric vehicles will be introduced.
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Fully electric cars will be taxed at 3p per mile and plug-in hybrids at 1.5p per mile.
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Remote gaming duty will rise from 21 per cent to 40 per cent.
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Five million pounds has been allocated to secondary school libraries and eighteen million for playground development across England.
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Changes to the Motability scheme will remove eligibility for luxury vehicles.
We will continue to monitor developments as further detail is published, and will contact clients again if additional guidance or implications arise.