Chancellor Rachel Reeves has announced key measures related to the upcoming Budget, with some details released prior to the official announcement by the governmental forecaster.
One significant aspect of the Budget is the decision to freeze income tax thresholds until 2031, which is three years longer than initially planned. This means that individuals may find themselves in higher tax brackets due to pay increases, without any adjustment to account for inflation. It is noted that Scotland has its own income tax rates.
Additionally, drivers of electric vehicles (EVs) and hybrids will incur new road taxes starting in 2028, which will be based on the number of miles driven. Meanwhile, the frozen fuel duty will remain unchanged for an interim period starting in April, followed by a gradual increase from September 2026.
The Chancellor has also confirmed minimum wage increases effective from April. Eligible workers aged 21 and above will see their wages rise to £12.71 per hour. Other age groups will also experience wage increases, including those aged 18-20 and 16-17.
Homeowners in England with properties valued at £2 million or more will face a council tax surcharge beginning in April 2028. This measure introduces a tiered system based on property value, affecting approximately 100,000 properties.
Regulated rail fares in England will remain unchanged until March 2027, marking the first freeze in 30 years. Unregulated fares will still be subject to pricing by train operators.
In savings news, the annual tax-free limit for cash Isas will decrease to £12,000 for those under 65, although individuals over 65 will not face a limit reduction.
Lastly, changes to universal credit will be brought forward, removing the two-child cap on claims starting in April next year.
These measures come in the context of ongoing discussions surrounding cost of living pressures and public finance management.
Source: https://www.bbc.com/news/articles/c5y2g2qn0eyo?at_medium=RSS&at_campaign=rss