MATT OLIVER, EMMA TAGGART

The total tax increases, by 2029-30, will amount to £26bn, with 920,000 more higher-rate taxpayers by that point.

That will mean a record tax burden of 38.3pc of GDP by the end of the decade.

Income tax

• The Chancellor has extended the freeze on income tax thresholds for another three years beyond 2028.
• This stealth tax is expected to raise £8.3bn a year.
• It will mean income tax thresholds do not increase with inflation, meaning more people will fall into higher bands when they receive pay rises.
• Thresholds will stay the same for the 2028-29, 2029-30 and 2030-31 financial years.
• This will lead to an estimated 920,000 extra higher rate taxpayers, according to the Office for Budget Responsibility.

Pay per mile tax on EVs

• Electric vehicle drivers are facing a new pay-per-mile tax from 2028-29, charging 3p per mile.
• It will be in addition to other road taxes and cost the average driver £255 a year to begin with.

[…]

Fuel duty

• Fuel duty has been frozen at the current rate of 52.95 pence per litre of petrol or diesel for a further five months.
• This includes an extension of the 5p temporary cut, which will be unwound in September 2026.
• From April 2027, fuel duty will then increase annually in line with the RPI measure for inflation.
• This is expected to cost motorists £2.4bn next year and £900m a year thereafter.

Pension salary sacrifice

• Salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from National Insurance from April 2029.
• This means that salary-sacrificed contributions above that limit will be subject to both employer and employee National Insurance, or 15pc and 8pc respectively for earnings under £50,270 and 2pc on income above that level.
• The policy is expected to raise £4.7bn in 2029-30 and £2.6bn in 2030-31.

Property

• The owners of properties worth £2m or more face a new “high value council tax surcharge” from April 2028.
• There will be four bands, with properties worth £2m to 2.5m incurring a surcharge of £2,500 and the charge rising to £7,500 for those worth £5m or more.
• Property income tax will also rise by two percentage points from April 2027, to 22pc, 42pc and 47pc for the basic higher and additional rates.

Savings and dividends

• The amount you can save tax-free in a cash Isa will be slashed from £20,000 to £12,000, from April 2027 – unless you are aged over 65.
• The basic and higher rates of tax on dividends is also rising by two percentage points to 10.75pc and 35.75pc respectively, from April 2026.
• Savings income tax will rise by two percentage points from April 2027, to 22pc, 42pc and 47pc for the basic higher and additional rates.

Energy bills

• R​eeves is also planning to cut an estimated average of £76 from annual domestic energy bills by moving the most expensive green levy from bills to direct taxation.
• The Renewables Obligation, which funded the first generation of wind farms, costs the average consumer about £102 a year but from now till 2029 the Treasury will fund 75pc of the costs.

[…]

Welfare spending surge

• Welfare spending is expected to climb £16bn higher by the end of the decade, due to policy changes and higher-than-expected unemployment.
• Extra costs include a decision to scrap the two-child benefit cap at £3bn a year, along with an extension of the winter fuel payment scheme costing £1.7bn.
• Costs are also being driven higher by the Government’s about-turn on tightening the eligibility for Personal Independence Payments (PIP); an increase in disability caseloads; and inflation-linked increases in working-age benefits and the state pension “triple lock”.

The Telegraph: continue reading 

The Budget in a Nutshell!

The highest tax burden on record

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