Budget at a glance – Eight key changes including surprise pay rise for millions and cheaper pints
Date: 2024-10-30HOW will today’s Budget hit your wallet? We round-up the key points.
Today, Rachel Reeves revealed an Autumn Budget with £40billion worth of tax rises.
We take a look at eight key changes that could affect your finances.
FREEZE ON INCOME TAX THRESHOLDS
In her first Budget as Chancellor, Rachel Reeves announced a surprise boost to pay packets – but you’ll have to wait FOUR years before you see any change to your salary.
The amount of money you can earn before you pay tax used to rise with inflation – but the current thresholds have been frozen until 2028.Â
Ms Reeves said:  “I am keeping every single promise on tax that I made in our manifesto.Â
“So there will be no extension of the freeze in income tax and National Insurance thresholds beyond the decisions of the previous government.Â
“From 2028-29, personal tax thresholds will be uprated in line with inflation once again.
“When it comes to choices on tax, this government chooses to protect working people every single time.”
BOOST FOR BEER IN PUBS
Pubs will be able to slash 1p off the price of a pint – but Reeves didn’t spare all alcohol from an increase.
She said: “I can confirm that alcohol duty rates on non-draught products will increase in line with RPI from February next year, but nearly two-thirds of alcoholic drinks sold in pubs are served on draught.
“So today, instead of uprating these products in line with inflation, I am cutting draught duty by 1.7%, which means a penny off a pint in the pub.â€
However, the hospitality industry has already hit back at the plans.
Stephen Russell, co-founder of Kent-based Copper Rivet Distillery and UK Spirits Alliance spokesman, said:  “The Chancellor’s increase in excise duty on spirits is a kick in the teeth to distillers, landlords and working people who will feel this in their pockets.
“Pubs are more than pints – a third of all alcoholic drinks sold across hospitality are spirits.
“Today’s decision won’t stop thousands more pubs and distillers closing down.
“We need action not gimmicks, and we need a government to stop discriminating against the iconic British spirits industry.
“This decision will increase those losses in future and will cost jobs, reduce investment and damage growth.”
SMOKERS HIT BY TOBACCO RISES
Smokers will also be hit in the pocket as there will be a hike to tobacco duty rates meaning prices will rise.Â
Speaking in The Commons, Ms Reeves said: “I can confirm that the government will renew the Tobacco Duty escalator for the remainder of this Parliament at RPI+2% and increase duty by a further 10% on hand-rolling tobacco this year.”
She added: “Alongside an additional one-off increase in tobacco duty to maintain the incentive to give up smoking.”
STAMP DUTY CHANGE
There was also a huge stamp duty change revealed in her speech.
Buyers will face an increase to stamp duty on second homes of 2% from 5%, which will be unwelcome news to landlords or those with second homes.
The Sun has also confirmed that first-time buyers will see an increase in stamp duty from April 2025 as the temporary reduction on rates ends.Â
BENEFIT PAYMENT BOOST
Reeves also confirmed working age benefits like Universal Credit, Attendance Allowance and Personal Independence Payment will rise.
They will go up by 1.7% from next April in line with September’s inflation figures.
It means a single person on Universal Credit under 25 on £311.68 per month now will see payments go up to £316.97.
Meanwhile, someone on the lower rate of PIP currently receiving £72.65 a week will see payments rise to £73.88.
Those on the state pension will also see their weekly entitlement rise from next April, but by 4.1% instead.
This is because the state pension rises is subject to the “triple lock” which means it goes up based on whatever is highest out of wages for the previous May to July, 2.5% or the previous September’s inflation figures.
Wages from May to July were 4.1%, according to the Office for National Statistics (ONS) – highest out of the three this year.
MINIMUM WAGE INCREASE
Three million workers will see their pay rise after the Chancellor committed to raising the National Minimum and National Living wages.
The Government will hike the National Living Wage, for workers aged 21 and over, by 6.7% from next April from £11.44 to £12.21.
Meanwhile, the National Minimum Wage, which applies to 18 to 20-year-olds, will go up from £8.60 to £10 – a 16.3% rise.
The changes to pay packets will be worth up to £2,500 extra a year.
CRACK DOWN ON BENEFIT FRAUD
The Chancellor also promised to follow through with a crackdown on benefit fraudsters by giving the DWP access to bank accounts to recoup lost cash.
The Chancellor said: “We will expand DWP’s counter-fraud teams using innovative new methods to prevent illegal activity and provide new legal powers to crack down on fraudsters including direct access to bank accounts to recover debt.
“This package saves £4.3billion a year by the end of the forecast.
“The government will shortly be publishing the ‘Get Britain Working’ white paper tackling the root causes of inactivity with an integrated approach across health, education and welfare.
“We will provide £240million for 16 new trailblazer projects targeted at those who are economically inactive and most at risk of being out of education, employment or training to get people into work and reduce the benefits bill.”
RELIEF FOR DRIVERS
Drivers will also be relieved as Reeves confirmed a freeze to fuel duty will continue for the 15th year in a row.
The announcement from the Government is a massive win for The Sun’s Keep it Down campaign.
Fuel duty is a tax taken from fuel sold in the UK including petrol and diesel and paid to the Government.
If the duty had been allowed to rise in line with inflation since 2010, when it was first frozen, Britain’s drivers would now be paying 93.47p on a litre of fuel rather than the current 52.95p once VAT is included.
BRITAIN’S MOST MEMORABLE BUDGETS
Today is the first Labour budget for 14 years – and the first ever to be delivered by a female Chancellor.
Brits are bracing for a raft of tax hikes as Rachel Reeves tries to plug the “£22billion black hole” she says she’s found in government accounts.
Here are five other budgets which have caused a stir over the years.
1979 – Geoffrey Howe, Conservative
Margaret Thatcher’s Chancellor Geoffrey Howe slashed both the top rate of income tax and the standard rate.
He also doubled VAT – shifting the tax burden from income to consumption in a huge change for Brits.
Howe also eased controls on foreign exchange in a bid to control inflation.
The budget signalled a massive break from the last Labour government and set the pattern for decades to come.
1988 – Nigel Lawson, Conservative
Nigel Lawson (dad to domestic goddess Nigella) massively slashed income tax again.
The deputy Commons speaker twice cleared the chamber amid noisy protests from Labour MPs slamming the tax cuts.
Lawson also set off a property bonanza by announcing an end to double mortgage tax relief for couples buying homes.
1993 – Norman Lamont, Conservative
In March 1993 the economy was still reeling from Black Wednesday, when the pound crashed out of the European exchange rate mechanism.
Lamont announced tax rises including VAT on domestic gas and electricity.
Later that year Lamont’s successor Ken Clarke froze personal tax allowance and brought in stealth taxes on insurance and plane passengers.
The Lamont and Clarke budgets marked the end of the Tories’s scything tax cuts – and set the stage for Labour’s return to office in 1997.
2002 – Gordon Brown, Labour
Brown raised national insurance by a penny on the pound to fund higher spending on the NHS.
The future PM had fretted over a possible backlash from voters who had re-elected Labour in 2001.
But he managed to pull off the largest rise in health spending in the history of the NHS.
2009 – Alistair Darling, Labour
Labour’s last budget before today came amid the credit crunch and soaring unemployment.
Darling ramped up taxes and borrowing in a bid to fill up draining Treasury coffers.
Tory leader David Cameron blasted Labour’s ‘utter mess’ – and was in power a year later.
2022 – Kwasi Kwarteng, Conservative
Kwarteng unveiled his economic package less than a month after becoming Liz Truss’s Chancellor.
Technically, it was a fiscal statement rather than a budget – but it turned out to be just as seismic.
Rising Tory star Kwarteng announced £45billion in tax cuts including a drop in all rates of income tax.
Markets took frights and the pound went into freefall before the Bank of England waded in to stop a run on UK pension funds.
Mortgage rates soared and Kwarteng was out of the job just three weeks later.
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