Budget 2024: Key points at a glance

Adapted from BBC News Article 30 October 2024

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.

Personal taxes

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

Business taxes

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

Transport

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 Huddersfiel

Drinking and smoking

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

Wages, benefits and pensions

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

Housing

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%

UK debt, 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

Official definition of UK government debt loosened by including a wider range of financial assets, such as future student loan repayments

Government spending and public services

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

Other measures

£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