Rachel Reeves’ budget, presented to the House of Commons on 31st October 2024, introduced a set of measures aimed at tackling economic inequality and investing in critical public sectors, while raising tax revenue through various fiscal reforms.
Key tax changes include removing the private school VAT exemption from January 2025, which aims to generate funds for public education. Additionally, the “non-dom” tax status will be abolished, requiring high earners residing in the UK to pay full UK taxes from April 2025. Higher capital gains taxes will apply to property sales, with the lower rate rising to 18% and the higher rate to 24%.
To support essential services, the NHS and education systems will see significant boosts. Reeves has committed £22.6 billion to the NHS, targeting reduced wait times and improving outdated facilities, while education funding will include increased teacher recruitment and a raised core budget for schools. Additional resources are also allocated to expand affordable housing, supporting around 5,000 new homes and providing aid to small- and medium-sized housebuilders.
Further measures are designed to support economic stability. Fuel duty freezes and the £0.05-per-liter reduction remain in place, addressing cost-of-living concerns. National Insurance for employers will increase to 15% starting in 2026, though smaller businesses will see relief through a raised Employment Allowance.
In welfare, benefit fraud prevention receives a £240 million funding boost, while targeted reforms aim to reduce economic inactivity. Other notable policies include extending the inheritance tax freeze until 2030 and incorporating inherited pensions under this tax from 2027.
Reeves announced that this budget reflects Labour’s strategy of balancing tax increases for wealthier individuals with investments in essential services, seeking both fiscal responsibility and social welfare improvements.
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