Rachel Reeves has revealed a £26 billion annual tax increase in a Budget that was leaked just before its official release. The Chancellor introduced a new mansion tax for homes valued over £2 million and confirmed the removal of the two-child benefit limit. She also announced a freeze on income tax thresholds, impacting over 1.5 million workers, along with new levies on the gambling industry.
During a lively session in the House of Commons, Ms Reeves defended her decisions, stating they were essential for creating a fairer and more secure Britain. The Mirror analyzes the key highlights from the long-awaited Budget announcement.
One significant change is the introduction of a tax on properties exceeding £2 million, affecting an estimated 100,000 to 200,000 homes. This levy is projected to generate approximately £400 million annually for the Treasury.
Additionally, a “high value council tax surcharge” will be imposed on properties valued over £2 million, with varying charges based on property bands. The OBR outlined the specifics, indicating that owners of such properties will face an additional recurring charge starting in April 2028.
Furthermore, the Budget marks the removal of the controversial two-child benefit limit, a policy criticized for exacerbating child poverty. The OBR estimates this change will cost the Treasury around £3 billion by 2029-30, benefiting approximately 450,000 children.
In another move, the Chancellor announced plans to raise £1.1 billion through reforms in gambling taxes, including a significant increase in remote gaming duty and the introduction of a new rate for remote betting from April 2026 and 2027, respectively.
Rail passengers will also benefit from the first fare freeze in 30 years, saving an estimated £600 million in the upcoming fiscal year. Moreover, income tax thresholds will remain frozen until 2030, leading to more individuals entering higher tax brackets as their incomes rise.
Additionally, a new mileage-based charge on electric and plug-in hybrid cars is set to be implemented in April 2028, expected to contribute £1.4 billion to the Treasury. The average household will see a reduction of £150 in energy bills starting from April, as part of efforts to alleviate the cost of living.
Pensioners are set to receive a boost with the state pension increasing by around £550 per year from April, following average earnings growth. The Budget also includes measures to raise funds through national insurance contributions on pension contributions and widen the tax on sugary drinks to combat obesity.
Other notable changes include adjustments to the cash ISA limit, a new tax on overnight stays in accommodation, and investments in NHS technology and infrastructure projects like the Lower Thames Crossing. Ms Reeves emphasized the Labour Party’s commitment to revitalizing the NHS and driving essential investments across various sectors for the nation’s growth and well-being.
