Chancellor of the Exchequer Rachel Reeves delivered one of the longest Budget speeches in history.

She was also the first female chancellor to do so.

It contained plans to raise around £40bn for spending on basic infrastructure and encouraging economic growth.

But raising revenues requires someone to pay for it; that’s all of us.

The government spends the money it has raised through taxation.

The way ahead

Two days later, discussions over whether it is a viable and fair plan are still booming across the media.

They will continue to be so for a while, not least as the weekend sees the election of the new Conservative Party leader—either Robert Jenrick or Kemi Badenoch.

Whoever is elected will likely use the Budget as their first attack on the government.

There are certainly voices of concern over some of the details, including the costs to smaller businesses of the rise in National Insurance contributions for employees.

The care sector is worried about its lack of ‘NHS exemption’ from the rises, and farmers are concerned about changes to the Inheritance Tax.

Whatever point you pick, there will be someone who doesn’t see the benefit.

But grumbling over government policy is an everyday part of political life, and there is nothing new here.

Just as the proof of the pudding is in the tasting, a budget’s success will only be seen in the months and years ahead.

Volatility

Budgets always provoke arguments, and the greater the dramatic changes in tax and spending, the louder the voices on both sides.

What is clear to all sides is that a new strategy and policy change were desperately needed.

From the ‘broken’ NHS, to crumbling roads, public services and infrastructure are creaking badly after 14 years of austerity.

Whatever the route taken, society must cope with many headwinds — wars, banking failures, pandemics, and environmental disasters.

Britain is not alone; every country has to tighten belts and chart new paths through these challenging economic times.

So, how will this affect you?

Below is a summary by FBTC of the main Budget changes that may affect you directly.

FBTC’s Budget summary

Making Tax Digital

  • Lower the threshold at which point an individual must submit information quarterly to HMRC from £30,000 to £20,000. Coming into force before the end of this parliament.

Income Tax

  • No change to tax rates,
  • Personal Allowance frozen,
  • Tax bands frozen until 28/29,

National Insurance

  • Class 2 and 3 to increase based on CPI from 25/26,
  • Class 1 and 2 thresholds to increase by CPI from 25/26,
  • Employers NIC increased to 15% From April 2025.
  • Secondary threshold lowered from £9,100 to £5,000 From April 2025
  • Employers Allowance increase from £5,000 to £10,500

VAT

  • No Change to VAT rate,
  • No Change to Registration threshold,
  • Private school now have to pay VAT on fees,

Corporation Tax 

  • No Change to Rates,

Capital Gains Tax 

  • Increase to main rate from 10% to 18%,
  • Increase to higher rate from 20% to 24%,
  • Tax on assets qualifying for Business Asset Disposal Relief to increase to 14% from April 2025 and 18% from April 2026,

Stamp Duty Land Tax

  • Additional SDLT charge for additional dwelling increased from 3% to 5%,
  • Increase to rate paid by companies and non-natural persons from 15% to 17%,

Furnished Holiday Let

  • Furnished Holiday regime removed from April 2025,

Inheritance Tax

  • No Change to Rate of thresholds,
  • Unused pensions to be included in estate from April 2027,
  • APR and BPR capped at £1 million at 100%, remaining at 50% relief.

Fuel Duty

  • No change to fuel duty,
  • 5p cut to remain in place until March 2026,

The more unusual stuff

  • Air passenger duty on private Jets increase by 50%,
  • Tobacco duty up,
  • New duty on Vapes,
  • Vehicle excise duty to increase with RPI,
  • New Vehicle excise duty for low CO2 emission cars,
  • No change to ISA limits,
  • British ISA scrapped,
  • All Benefits in Kind to be payrolled from April 26,
  • High Income Child Benefit Charge to remain repayable on income over £50,000, although can now be collected through PAYE Code,
  • HMRC late payment interest goes up by 1.5%