Rachel Reeves has announced a £26 billion annual increase in taxes in a Budget that was leaked just before its official release. The Chancellor revealed a new mansion tax for properties exceeding £2 million and confirmed the removal of the two-child benefit limit. Additionally, income tax thresholds will be frozen, affecting over 1.5 million workers. The gambling industry will face new levies, while fuel duty will remain unchanged until the following year, according to Reeves.
Addressing the House of Commons, Reeves stated, “These are my decisions, the right ones for a fairer, stronger, and more secure Britain.” The Mirror examines the key points from the long-awaited Budget, highlighting the new tax on homes valued over £2 million.
The Budget introduces a “high value council tax surcharge” for properties surpassing the £2 million mark. Owners of such properties will face an additional annual charge, ranging from £2,500 to £7,500, with an estimated revenue of around £400 million for the Treasury yearly.
Furthermore, the Budget scraps the controversial two-child benefit limit, a policy criticized for contributing to child poverty. The change is expected to cost the Treasury £3 billion by 2029-30 but is estimated to reduce child poverty by 450,000.
Labor MPs, along with former Prime Minister Gordon Brown, have long pushed for the removal of the two-child benefit limit. Reeves also announced that benefits will be adjusted for inflation in April. Additionally, a new tax on gambling is set to generate £1.1 billion by 2029-30, with Bingo Duty being eliminated.
Reeves unveiled the first rail fare freeze in three decades, benefiting existing rail passengers with a projected saving of £600 million in 2026/27. Income tax thresholds will remain frozen until 2030, potentially pushing more individuals into higher tax brackets. The Budget also introduces a mileage-based charge for electric and plug-in hybrid cars, expected to raise £1.4 billion for the Treasury.
Moreover, households can anticipate a £150 reduction in energy bills starting in April. Reeves criticized the Conservative’s ECO scheme for failing to address fuel poverty and pledged to cut average household energy bills. Pensioners will receive an increase of approximately £550 annually in state pensions from April next year.
The Budget includes pay hikes for about 2.7 million workers, with the National Living Wage rising to £12.71 per hour for individuals over 21. The Budget also imposes national insurance contributions on salary-sacrificed pensions, estimated to generate £4.7 billion annually. Additionally, a tax on sugary drinks will be expanded to combat obesity.
Reeves confirmed a reduction in the annual cash ISA limit to £12,000 for younger savers from April 2027. The Budget also introduces a new tax on overnight stays in accommodations, with funds allocated to regional authorities. A £300 million investment in NHS technology and infrastructure was announced, along with funding for the Lower Thames Crossing and various transportation projects.
