Rachel Reeves has revealed a yearly increase of £26 billion in taxes in a Budget that was leaked just moments before its official release. The Chancellor introduced a new mansion tax that will impact homes valued over £2 million and confirmed the removal of the two-child benefit limit, a decision advocated by anti-poverty activists for years. She also announced a freeze on income tax thresholds, affecting over 1.5 million workers, and imposed new levies on the gambling industry, while keeping fuel duty frozen until the following year.
During a lively session in the House of Commons, Ms. Reeves stated, “These are the decisions I have made, the right choices for a fairer, stronger, and more secure Britain.” The Mirror examines the key aspects of the long-awaited Budget presented by the Chancellor.
The Chancellor introduced a fresh tax on properties exceeding £2 million, estimated to impact between 100,000 and 200,000 homes. This levy, ranging from £2,500 to £7,500 annually, is projected to generate around £400 million for the Treasury each year.
Moreover, the Budget includes a “high value council tax surcharge” for properties valued over £2 million, as confirmed by the OBR. Starting from April 2028, owners of such properties will face an additional recurring annual charge based on valuation bands, ranging from £2,500 to £7,500.
In a significant move, the Chancellor abolished the contentious two-child benefit limit, a policy criticized for contributing to child poverty. Initially introduced by the Conservatives in 2017, it restricts child tax credits and universal credit to only the first two children in a family. OBR projections indicate a £3 billion cost to the Treasury by 2029-30, aiming to reduce child poverty by 450,000.
Amidst calls from Labour MPs and former Prime Minister Gordon Brown, Ms. Reeves also announced the uprating of benefits in line with inflation from April. Additionally, she detailed plans to raise £1.1 billion through reforms in gambling taxes, including an increase in remote gaming duty and the introduction of a new rate for general betting duty.
The Chancellor further declared the first rail fare freeze in three decades, expected to save rail passengers £600 million in the upcoming fiscal year. 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 measures include a new mileage-based charge on electric and plug-in hybrid cars, a £150 reduction in average household energy bills, and a boost of approximately £550 per year for millions of pensioners through an increase in state pension rates. Additionally, pay hikes for workers and changes to savings accounts were outlined, along with initiatives to invest in NHS technology and transportation infrastructure projects like the Lower Thames Crossing.