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Evening Standard
Evening Standard
Politics
Claudia Lee,Nuray Bulbul,Tom Place and Anthony France

Budget 2025 LIVE: Rachel Reeves unveils £26bn tax raid but cuts energy bills amid leak fiasco

Rachel Reeves London Income Tax electric vehicle

Chancellor Rachel Reeves has delivered her Budget to MPs after key details of the statement were released early.

She called the blunder by the Office for Budget Responsibility “deeply disappointing” as a “technical error” was blamed for the fiasco.

The Chancellor announced £26billion worth of tax rises as she seeks to plug a multi-billion public finances black hole.

She told MPs she will “more than double” the fiscal headroom against her stability rule to £21.7bn.

Among the key measures announced is the freezing of income tax thresholds for another three years to 2030/31.

A “high value council tax surcharge” will be introduced on properties worth more than £2 million - the so-called "mansion tax".

Four price bands will be introduced, rising from £2,500 for a property valued between £2 million to £2.5 million, to £7,500 for a property valued at £5 million or more, all uprated by inflation each year.

But in a cost-of-living boost for millions, she announced a £150 cut to the average household energy bill from April next year.

Follow the latest updates below....

School spending could drop when Government takes on Send costs, OBR warns

19:15 , Anthony France

Schools could face a fall in spending due to the Government taking on the cost of special educational needs and disabilities provision centrally from 2028/29, the Office for Budget Responsibility has warned.

The Government announced in the Budget on Wednesday that local authorities will not be expected to fund future Send costs once a statutory override keeping deficits off their balance sheets expires at the end of 2027/28.

Instead, future funding will be managed within the overall Government departmental expenditure limit envelope.

No savings have been identified to offset the estimated £6 billion pressure taking on Send spending will cost in 2028/29, the OBR said.

If the £6 billion needed comes from the Department for Education’s (DfE) core schools budget in 2028/29, it could mean a 1.7 per cent real fall in spending per pupil in mainstream schools, the OBR said, rather than the 2.4 per cent increase the Government had planned.

The Government has since said the Send pressure will not be absorbed from the schools budget, and said the OBR estimate does not account for Government decisions about improving the Send system.

Natalie Perera, chief executive of the Education Policy Institute, warned that while there is an imminent need to address rising costs of Send provision, the Government must not cut school funding to meet these pressures.

Association of School and College Leaders general secretary Pepe Di’Iasio said a 1.7 per cent drop in school spending “would clearly have a catastrophic impact on educational provision and it is imperative that the Government sets out how it intends to address this issue as a matter of urgency”.

Shadow education secretary Laura Trott said a cut in school funding would “push already struggling schools further into the red”.

“Labour is stripping money from classrooms and forcing more teacher cuts,” she added.

The OBR said in its forecast there is a “significant financial risk” due to the Government not setting out how it will deal with historic Send deficits facing councils.

The OBR has also forecast councils will have cumulative deficits of £14 billion by the end of 2027/28, when the statutory override expires.

Councils will not build up any further deficits from this point, the OBR said, but many would likely face bankruptcy when the statutory override expires.

The Government has not set out how it will address this issue, the OBR added.

Further details will be set out on plans to support local authorities with historic and accruing deficits through the upcoming Local Government Finance Settlement, the Government said.

A DfE spokesperson said: “This claim is incorrect – we are clear that any deficit will be absorbed within the overall government budget. These projections also do not account for the much-needed Send reforms this government will bring forward.

“We inherited a Send system on its knees and our changes will make sure children get support at the earliest stage, while bringing about financial sustainability for councils.

“We will continue engaging with parents, teachers and local authorities and will set out our full plans to reform the system through the Schools White Paper early next year.”

Salary sacrifice cap ‘is short-sighted tax grab undermining retirement security’

19:08 , Anthony France

Workers and employers will feel the “pain” from a £2,000 salary sacrifice cap on pensions announced in the Budget, finance experts have said.

Fears were raised that employers would make workplace schemes less generous and that people’s long-term financial security would be eroded.

The change means that salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from national insurance from April 2029.

Contributions above £2,000 will be treated as ordinary employee pension contributions in the tax system and subject to national insurance contributions.

A document, released by the Office for Budget Responsibility in error ahead of Chancellor Rachel Reeves’s Budget speech, said: “The policy results in an increase in NICs (national insurance contributions), which is estimated to raise £4.7 billion in 2029/30 and £2.6 billion in 2030/31.

“The costing assumes that, in most cases, employee pension contributions above £2,000 that were part of a salary sacrifice scheme will become subject to employer and employee NICs, either because they move to a standard pension scheme or continue in a salary sacrifice scheme under the new tax arrangements.”

Employers may offer salary sacrifice as part of their pension scheme as a tax-efficient way to help workers boost their pots.

The schemes enable people to maintain their take-home pay, as people end up paying lower NI contributions.

Yvonne Braun, director of policy, long term savings, health and protection, at the Association of British Insurers (ABI), said: “Capping salary sacrifice for pension saving is a short-sighted tax grab which will lower pension saving and undermine people’s retirement security.

“It also goes against the Government’s ambition to increase scale in pensions to drive more investments into UK businesses and infrastructure.

“While it’s encouraging that employers and payroll providers will have until 2029 to make the necessary changes to their systems, the wider work required to rebuild people’s trust in the stability of pensions will take years.”

Lisa Picardo, chief business officer UK at PensionBee, said: “Capping salary sacrifice sends the wrong message at a time when the UK needs to encourage greater long-term saving, not constrain it. Reforms should prioritise strengthening retirement outcomes and build on what we have, not tear them down.”

David Little, a partner in financial planning at Evelyn Partners, said the cap “could also lead to lower salary increases, scaled-back pension benefits, or even headcount reductions to offset costs.”

Labour must 'win the argument for the Budget', Chancellor tells MPs

18:38 , Anthony France

Labour must “win the argument for the Budget”, the Chancellor is telling the party’s MPs.

Rachel Reeves told a meeting of the Parliamentary Labour Party: “Let me say what we achieved today. I said that I wanted this to be a Budget that cut the cost of living, cut NHS waiting lists and cut the debt and the borrowing – and we’ve achieved all of those.”

She added: “Today, we delivered the Budget. Now, we’ve got to win the argument, and we’ve got to win the argument every single day.

“We have to win the argument for the Budget. We’ve got to campaign on the Budget – and that is what we must now do.”

Chancellor ‘makes everyone suffer’ because she has once again failed to listen, says wine and spirit body

18:31 , Anthony France

Strong criticism of Chancellor Rachel Reeves has come from the drinks industry who say they “despair at yet another tax raid on alcohol”.

A deflated Wine and Spirit Trade Association warned the Government’s “typically disappointing and shortsighted decision” to increase duty will perpetuate the economy’s “doom loop”.

The new tax raid on alcohol will damage British business, lead to higher prices for consumers and a reduction in sales, which in turn drains Treasury funds, the body said.

With RPI set at 3.66 per cent duty will go up by 11p on a bottle of Prosecco, 13p on a bottle of red wine and 38p for a bottle of gin from February 1.

When increases kick in next year, wine and spirit prices will have risen by almost £1 a bottle in 12 months, taking into account the ongoing burden of duty rises, the new waste packaging tax and VAT.

Miles Beale, chief executive of the Wine and Spirit Trade Association, said: “This Budget has been dubbed a death by a thousand cuts, and for wine and spirit businesses those cuts run deep.

Raising a toast to Chapel Down’s Rosé at vineyard in Kent (Chapel Down)

“Our members are still reeling from the tax hikes introduced in February, and the additional burden of the costly new glass tax, known as EPR. Coupled with rises in National Insurance, increases to the minimum wage and business rates, it is no surprise that wine and spirit producers - along with our beleaguered hospitality sector - feel under sustained attack.

“The Government’s typically disappointing and shortsighted decision to raise alcohol duty yet again will only prolong the doom loop.

“Despite the OBR at last acknowledging higher prices lead to a decline in receipts, the Government fails to recognise that its own policy is driving up those prices. Amazingly, the Treasury continues to press ahead with its ill-founded plan to pile further duty increases on alcohol.

“Prices will rise once more for consumers, British businesses will suffer, and Treasury receipts will continue to fall – forecast to be £700 million lower than last year and £1.1 billion lower than was forecast in March.”

Reeves - tackling child poverty a "moral duty"

17:53 , Tom Place

SNP reaction - Budget a "chaotic mess"

17:42 , Tom Place

Scotland's finance secretary Shona Robison has said the Budget "fails to deliver" for Scotland.

Robison said: “This Budget has been absolute chaos from start to finish.

"We needed a step change from the UK government with investment in public services, support for jobs and industry in Scotland and serious action on energy bills.

"Instead, we got a chaotic mess and the increase in funding for the Scottish government will not even cover half the cost of the employer’s national insurance contributions brought in this year."

Green reaction - Polanski hits back at Reeves' jibe

17:35 , Tom Place

Green Party leader Zach Polanski hit back at the Chancellor after she referred to his previous actions as a performing hypnotherapist in her Budget statement.

In response, Polanski posted on X: "A few things are getting bigger Chancellor: Green Party membership, Green Party polling, and Labour's increased desperate attacks."

Zack Polanski, leader of the Green Party of England and Wales (Andrea Domeniconi/Fossil Free London/PA)

Polanski went on to criticise Labour MPs hypocrisy regarding the two-child benefit limit, posting: “They were literally whipped to vote for it and then the Prime Minister suspended those who didn't. They really are totally devoid of any moral principle. They respond to one thing - and that's political pressure.”

Polanski further criticised the measures unveiled in the Budget as "protecting power and wealth".

Lid Dem reaction - Davey slams "botched Budget"

17:18 , Tom Place

Liberal Democrats leader Ed Davey responded to the Chancellor’s Budget by saying: "you can't tax your way to growth."

Attacking former Prime Minister Boris Johnson’s Brexit deal, Davey said that the solution to the "all-time high" tax burden is a new trade deal with Europe.

Reeves has "diagnosed the disease but won’t administer the cure,” he said.

Reform reaction - Farage calls budget "an assault on aspiration and an assault on saving"

17:12 , Tom Place

Reform UK leader Nigel Farage gave his response to the budget at a news conference in central London earlier today.

Farage said the budget would do nothing to help an economy “on the edge of a precipice.”

Farage reiterated Reform proposals to cut taxes by reducing spending, with cuts particularly focused on overseas nationals, including those with settled status from the EU.

"We are in an economic doom loop and no one seems to recognise it - neither the last Conservative government nor this Labour government," he said.

Reform UK leader Nigel Farage (Peter Byrne/PA credit) (PA Wire)

Budget Calculator - find out how the Chancellor's statement affects you

17:03 , Tom Place

The Standard have published a ready reckoner calculator to help readers work out whether they will be better or worse off once all the measures announced in today’s budget come into effect.

Over 1.7 million people face paying more income tax after the Chancellor froze thresholds, with many dragged into paying the tax for the first time or shifted into higher bands.

Some levies placed on energy bills will go, lowering bills for millions of households, while the two-child benefit limit has been scrapped.

You can input details into the calculator here to see how the Budget will affect your finances.

Badenoch says that "chaos reigns in No.10"

16:50 , Tom Place

Starmer says Labour will "deliver on your priorities"

16:46 , Tom Place

Reeves: "I would have rather the circumstances were different, but I have to live in the world as it is".

16:41 , Tom Place

Regarding the minimum wage increase, Reeves has said the move will "put more money in people's pockets" which will in turn be good for businesses.

When asked if working people are paying for the country's rising welfare bill, the Chancellor said that the welfare system was broken, and that Labour would not leave it unchanged.

Reeves said that the government had clawed back money misspent by their Conservative predecessors, and reiterated that people are getting money off rail fares, prescriptions, and childcare.

Regarding the possibility of further tax rises, Reeves referenced the £22bn black hole in the public finances that the Labour government inherited.

She also said that she is determined to beat the current productivity forecasts, before closing the news conference.

More from Reeves' news conference

16:26 , Tom Place

When told that she had broken Labour's election manifesto promise not to touch National Insurance, VAT or income tax, Reeves refused to "get into semantics", but recognised that she is asking ordinary people "to pay a little bit more".

The Chancellor also said she was closing loopholes and asking those with the broadest shoulders to pay more, referencing the ‘mansion tax’, saying she has kept this contribution as low as possible

When quizzed about the income tax threshold freeze, she said: "It is the right thing to do."

When asked about the budget being released in error, Reeves said that she only found out about the leak when she was in the Chamber.

Reeves grilled by media

16:19 , Tom Place

The Chancellor is first asked a question by a reporter from her Leeds West and Pudsey constituency, who said many people and businesses in her constituency are struggling with the cost of living.

When asked if the she can look constituents in the eye and ensure things will get better as a result of her Budget, Reeves said there will be a £150 reduction in energy bills which will benefit people in her constituency and across the country.

Reeves also re-emphasised that the government is freezing prescriptions and putting money into the NHS.

When asked if she's done enough to appease MPs in her own party, the Chancellor said that her focus is on the country as a whole, and the people who elected Labour into government.

"The Labour Choice"

16:13 , Tom Place

Rachel Reeves holding news conference

16:10 , Tom Place

Chancellor Rachel Reeves has said that her Budget intends to cut debt and borrowing, and cut NHS waiting lists, during a visit to a hospital this afternoon.

She is now answering questions from the press.

Pay-per-mile: new electric car tax explained

16:03 , Tom Place

Up to half a million Londoners face being hit by the new pay-per-mile tax on electric vehicles, following an announcement made in Rachel Reeves’ budget.

The levy will be introduced in April 2028, with owners of 100 per cent electric vehicles paying 3p per mile.

Here, Ross Lydall explains how the 500,000 London EV drivers will pay, and how their bills will be calculated.

(PA Archive)

More fallout from the OBR leak

15:58 , Tom Place

A spokesman for Rachel Reeves has confirmed that the Chancellor has confidence in the head of the OBR, Richard Hughes.

When asked during today’s press conference if he will resign as a result of the leak, Hughes said that he will wait for the conclusion of an investigation by the OBR's oversight board, and will be abide by its recommendation.

He says the OBR understands how the leak happened but the oversight board will examine why.

Hughes said: “I always serve so long as I have the confidence of the chancellor and the Treasury committee.”

When asked if he was embarrassed and ashamed of the leak, Hughes responded: “It’s not something that we like to happen. It was an accident. We will do an investigation and abide by its conclusions.”

Richard Hughes, Chair of the OBR (ParliamentTV / PA)

'Mansion tax': what it means for London homeowners

15:48 , Tom Place

Homeowners with homes valued at £2 million or higher will face a so-called ‘mansion tax’ from April 2028, as announced by Chancellor Rachel Reeves in today’s Budget.

What does it mean for London homeowners?

Read the full story by Anna White here.

Who is Nusrat Ghani - and why did she oversee the Budget?

15:41 , Tom Place

The deputy speaker attracted a lot of attention during Rachel Reeves’ statement today, with her quick-witted quips towards rowdy MPs catching the eye of many.

Nusrat Ghani has served as both deputy speaker and chairman of Ways and Means since 2024.

She presided over the chamber following a long-standing parliamentary convention - that the speaker (Sir Lindsay Hoyle) traditionally steps back, leaving the session to be overseen by a deputy speaker.

First elected in 2015, Ghani is the Conservative MP for Sussex Weald, and has previously held positions in the Foreign, Commonwealth and Development Office and the Department for Business and Trade.

She became the first ethnic minority MP to have the role of deputy speaker in 2024.

Nusrat Ghani (Chris McAndrew/UK Parliament/PA) (PA Media)

Londoners hit hard by budget

15:29 , Tom Place

Londoners will bear the brunt of the Chancellor’s multi-billion pound Budget tax raid, with owners of expensive homes and thousands of workers being hit hard by tax hikes.

Tax rises amounting to £26billion were announced, as Chancellor Rachel Reeves battles a downgrade in forecast to Britain’s economic growth.

Reeves also confirmed a series of measures aimed at helping people who are struggling with living costs, including the end to the two-child benefits limit, a £150 energy bill cut for average households, and a hike in the minimum wage.

Read the full story from Chief Political Correspondent Rachael Burford here.

Chancellor Rachel Reeves leaving 11 Downing Street with her ministerial red box before delivering her Budget in the House of Commons (Frank Augstein/PA) (PA Wire)

The Budget - Property announcements

15:14 , Tom Place

From the introduction of a ‘mansion tax’, to increasing the tax on property income, there were a number of property announcements contained in today’s Budgets.

Read all about them here, from Deputy Editor, Homes & Property, Meghann Murdock.

Chancellor of the Exchequer Rachel Reeves poses outside 11 Downing Street (PA) (PA Wire)

OBR - Budget headroom back to average levels

15:08 , Tom Place

Rachel Reeves has lifted her budget headroom back to average levels, the OBR have said.

The £22bn margin against the current balance target is close to the average revision to pre-measures forecast between fiscal events in the fourth year of the forecast, at £21bn, explained OBR chief Richard Hughes.

There is now more chance of meeting the fiscal rules, reassuring financial markets.

Screen grab taken from the website of the Office for Budget Responsibility showing their economic and fiscal document (obr.uk/PA) (PA Media)

More from the OBR

15:05 , Tom Place

OBR chief Richard Hughes has explained that the productivity performance of the UK has continued to undershoot the watchdog’s forecasts.

As such, the expected rebound is unlikely to materialise, with the long-term forecast for productivity downgraded from 1.3% to 1%.

Hughes has also said that the OBR has revised up its forecast for earnings growth and inflation in the near term.

They have said that the near-term loosening shifts back the weight of the planned fiscal consolidation by a year compared to forecasts in March.

Three quarters of the planned cuts to borrowing will come from tax, compared with two thirds outlined in last year’s budget.

OBR apologise again for "technical error"

14:55 , Tom Place

The Office for Budget Responsibility have presented their Economic and Fiscal Outlook, with Richard Hughes, head of the OBR, starting with an apology.

Hughes said: “A link to our economic and fiscal outlook document went live on our website too early this morning, and was subsequently removed.

“We apologise to the chancellor and members of parliament for this technical error, and have initiated an investigation into how this happened.

“It’ll be reporting to our oversight board, the Treasury, and the Commons Treasury committee on how this happened, and how to make sure it doesn’t happen again.”

Budget 2025 - Winners and Losers

14:46 , Tom Place

Rachel Reeves has launched a £26 billion tax raid on Britain in her second Budget, risking a backlash by imposing a wave of new levies despite having said after her first Budget last year that she would not hit the country with a second huge tax grab.

While today’s budget means many will pay higher taxes, others will benefit from some of the new measures.

Who are the winners and losers Reeves’ fiscal plans? Read more from Political Editor Nicholas Cecil here.

Rachel Reeves before delivering her Budget (Luke Jones/PA Wire)

Martin Lewis explains the two-child benefit limit

14:39 , Tom Place

OBR to answer questions on budget leak

14:32 , Tom Place

The Office for Budget Responsibility (OBR) are about to hold a press conference.

Earlier today, they published their forecast 40 minutes before Rachel Reeves announced her budget in the House of Commons.

...and Kemi Badenoch's response

14:26 , Tom Place

Chancellor Rachel Reeves on X...

14:24 , Tom Place

Markets stable after Budget announcement

14:22 , Tom Place

There has been a relatively calm early reaction on financial markets following Chancellor Rachel Reeves’ budget announcement.

After initial excitement following the OBR leak, gilt yields have been relatively steady, possibly because its forecasts were not as negative as expected.

Higher yields mean higher borrowing costs - and UK 10-year gilt yields were at about 4.5% before the leak, and rose up to 4.542%, before a subsequent yield decline, currently at 4.453%.

Key points refresher

14:13 , Tom Place

A recap on some of the key announcements from today’s budget:

  • Average household energy bills will be cut by £150 from next April
  • Freeze on income tax thresholds extended until 2030/31
  • Owners of properties worth more than £2 million, many of which are in London, will have to pay a new “mansion tax”
  • £2.1 billion will be raised by the Treasury through increasing tax rates on dividends, property and savings income
  • There will be a freeze on regulated rail fares, and fuel duty will be frozen until next September
  • The two-child benefit cap will be scrapped
  • The OBR has increased its forecast for economic growth this year from 1% to 1.5%

You can read a full list of the key points here, from Political Editor Nicholas Cecil.

Chancellor Rachel Reeves was delivering her second Budget (Luke Jones/PA) (PA Wire)

Badenoch not holding back - describing the budget as a "smorgasbord of misery"

14:07 , Tom Place

Kemi Badenoch has launched a savage attack on Rachel Reeves, saying she will go down as the country’s worst chancellor.

She says Reeves released most of the speech in advance, making the UK a “shambolic laughing stock.”

"There is no growth and no plan," Badenoch said.

"Just look at the circus around this Budget - she has become the first chancellor to release the whole Budget ahead of time," she said.

She describes Reeves as “spineless, shameless and completely aimless,” with her budget “littered with broken promises.”

Conservative Party leader Kemi Badenoch (House of Commons/UK Parliament/PA) (PA Wire)

Full OBR Economic and Fiscal Outlook

13:57 , Tom Place

The Office for Budget Responsibility have re-released its Economic and Fiscal Outlook.

It was originally accidentally published early around two hours ago - you can now read the full outlook here.

Pay-per-mile tax to hit electric vehicle drivers

13:52 , Tom Place

Drivers of electric vehicles will be hit with a new pay-per-mile tax that will cost an average of more than £250 a year from 2028, announced Rachel Reeves in today’s budget.

The new levy will cost 3p per mile for battery electric cars and 1.5p per mile for plug-in hybrids, which combine a conventional engine with a top-up battery.

The pay-per-mile charge will increase annually in line with inflation, according to OBR documents.

Read the full story from Ross Lydall here.

(PA Wire)

Badenoch: "She promised stability, she delivered chaos"

13:49 , Tom Place

Conservative leader Kemi Badenoch is now responding to Rachel Reeves’ budget.

She has said this should be Reeves's last budget as chancellor, describing the past few days as a "total humiliation".

Badenoch said: "Last year she put up taxes by £40bn, the biggest tax raid in British history.

"She swore it was a one off. Today she has broken every single one of those promises.

"If she had any decency she would resign."

Conservative party leader Kemi Badenoch (House of Commons/UK Parliament/PA) (PA Wire)

Criminal inquiry demanded following ‘unprecedented’ leak of Chancellor's Budget

13:46 , Tom Place

Before Rachel Reeves made her statement, today’s budget was thrown into chaos after an unprecedented leak of its contents.

Rachel Reeves said the Office for Budget Responsibility's (OBR) accidentally releasing its forecasts before she revealed her Budget was "deeply disappointing".

Read the full story from Chief Political Correspondent Rachael Burford here.

Reeves makes closing statements

13:42 , Tom Place

Reeves: “This Labour government is changing our country. In the face of challenges on our productivity, I will grow our economy through stability, investment and reform.

“I’ve met my fiscal rules and built our economic resilience for the future. I have asked everyone to contribute – yes, for the security of our country and the brightness of its future.

But I have kept that contribution as low as possible by reforming our tax system, making it fairer and stronger for the future.

“I have protected our NHS – maintaining public investment and driving efficiency in government spending. I have taken action on our broken welfare system – rooting out waste and lifting children out of poverty. And I have cut the cost of living – with money off bills and prices frozen. All while keeping every single one of our manifesto commitments.

“Those are my choices - Not austerity, not reckless borrowing, but cutting the debt, cutting waiting lists, cutting the cost of living.

“Those are the Labour choices. Promised and delivered by this government. Promised and delivered by this Budget.”

Chancellor Rachel Reeves delivers her Budget in the House of Commons (House of Commons/UK Parliament/PA) (PA Wire)

Energy bills to be cut by £150 next April

13:39 , Jonathan Prynn

Energy bills to come down by average of £150 by April through scrapping the “failed” ECO scheme to tackle fuel poverty as well as taking other legacy costs off bills.

More from Reeves on the two-child limit

13:36 , Tom Place

Reeves: “Neither can I in good conscience leave in place the vile policy known as the rape clause - requiring women to prove if their children have been conceived non-consensually to receive support.

“I’m proud to be Britain’s first female Chancellor. I take the responsibilities that come with that seriously.

“I will not tolerate the grotesque indignity to women of the rape clause any longer. It is dehumanising. It is cruel. And I will remove it from the statute book.

“I can announce today – fully costed and fully funded - the removal of the two-child limit in full from April.”

"Vile" two-child limit to be removed from April

13:34 , Tom Place

Rachel Reeves has condemned the Conservatives while abolishing the two-child limit in full from April.

Referring to the Tory policy, Reeves said: “Even on their own terms, it has failed. It has made almost no difference to the size of families.

“The welfare bill has continued to rise. But what it has done is push hundreds of thousands of children into poverty since it was introduced. They said they were punishing parents’ choices – but it’s kids who have paid the price for the policies of a party which opted for cynical gimmicks over real savings in the welfare system.”

Gaming duties hiked

13:27 , Jonathan Prynn

Remote Gaming Duty increased from 21% to 40% with duty on online betting increasing from 15% to 25%. Bingo Duty abolished from April 2026

Reeves on electric vehicles

13:27 , Tom Place

Reeves: “I will ensure that drivers are taxed according to how much they drive and not just the type of car they own by introducing Electric Vehicle Excise Duty on electric cars.

“This will be payable each year alongside Vehicle Excise Duty at 3p per mile for electric cars and 1.5p for plug-in hybrids, helping us to double road maintenance funding in England over the course of this Parliament.

“Alongside this, I am providing support to boost our British car industry - increasing the threshold for the Expensive Car Supplement on EVs to £50,000, saving over a million motorists £440 a year, providing £1.3bn in additional funding for the electric car grant - extending it to 2030 and taking total funding to £2bn, as well as delaying changes to the Employee Car Ownership Scheme.”

Business rates lowered for smaller high street firms

13:24 , Jonathan Prynn

Business Rates lowered for over 750,000 smaller retail, hospitality and leisure properties paid for through higher rates on properties worth £500,000 or more, “like the warehouses used by online giants.” Also a package of support worth over £4.3bn over the next 3 years for a property of any size seeing a large increase in their bill.

New £2000 cap on salary sacrifice into a pension

13:20 , Jonathan Prynn

Chancellor introduces £2,000 cap on salary sacrifice into a pension with contributions above that taxed in the same way as other employee pension contributions. These changes will come into effect in 2029.

Deputy Speaker intervenes

13:19 , Tom Place

Deputy Speaker Nusrat Ghani has had to get involves on a number of occasions through Rachel Reeves’ statement.

The chamber has been loud on both sides of the aisle - there have been shouts, cheers and jeers throughout.

Deputy Speaker Nusrat Ghani (PA Wire) (PA Wire)

Savers, landlords, and shareholder to pay higher tax rates

13:17 , Jonathan Prynn

Savers, landlords and shareowners face 2 percentage point increase on income from interest, rent and dividend

Reeves attacks Conservatives as she announces public service measures

13:15 , tom place

The Chancellor has committed to providing £5m for libraries in secondary schools and £18m for improving and upgrading playgrounds across England.

In doing so she has attacked the Conservatives, saying they "left classrooms crumbling and waiting lists sky-high; weakened our productivity and choked our economic growth."

She has also slammed Reform, who she says "promise more than £100bn of cuts with no detail on where those cuts will come from," describing it as "a recipe for devastating damage to public services".

Luxury cars removed from Motability scheme

13:13 , Jonathan Prynn

Motability will remove luxury vehicles from the scheme “getting the scheme back to its original purpose of offering cost effective leases to disabled people. “

Reeves launches dig at Farage

13:11 , Tom Place

Reeves: “We are ramping up sanctions on Russia, and we are freezing known Russian assets - and let me be clear, I don’t mean the Honourable Member for Clacton.”

Budget to invest in technology to improve patient service

13:08 , Tom Place

Reeves: “Today I’m announcing a £300m investment in technology to improve patient service, and 250 new Neighbourhood Health Centres, expanding more services into communities so that people can receive treatment outside of hospitals and get better, faster care where they live, with over 100 to be delivered by 2030 including in Birmingham, Truro and Southall.

“The Labour Party founded our NHS and we are renewing our NHS.”

Rachel Reeves addresses OBR blunder

13:05 , Tom Place

Here is Rachel Reeves condemning the OBR blunder that resulted in the budget leaking early.

Fuel duty 5p "temporary" cut to be unwound from September next year

13:03 , Jonathan Prynn

Fuel duty rates frozen for a further five months until September 2026,. However the “temporary” 5p cut introduced at Spring Budget2022 will be unwound in three stages. The cumulative cost of freezing fuel duty rates between 2010-11 and 2026-27 and the 5p cut, has risen to £120 billion

Reeves on the budget balance deficit

12:59 , Tom Place

Reeves: “While the current budget balance is in deficit by £28.8bn in 26/27 and £4.6bn in 27/28, it moves into a surplus of £3.9bn in 28/29, £21.7bn in 29/30 and £24.6bn in 30/31, more than doubling our headroom against the stability rule and meeting that rule a year early.

“And our net financial debt is 83.3% in 26/27, 83.6% in 27/28, 83.7% in 28/29, falling to 83.0% in 29/30 and 82.2% in 30/31.”

Chancellor Rachel Reeves delivering her Budget in the House of Commons (PA Wire)

Reeves: Fiscal rules are "non-negotiable"

12:57 , Tom Place

Reeves: “My fiscal rules will get borrowing down while supporting investment. The stability rule – that day-to-day expenditure must be met through tax receipt, and the investment rule – which allowed me to increase investment while getting debt on a downward path.

“Those fiscal rules are non-negotiable. I met them at the Budget last year, I met them in the Spring and I have met them today.”

Reeves: Electricity prices to be cut

12:54 , Tom Place

Reeves has said that electricity prices will being cut for many manufacturers.

She will be publishing a report on the nuclear industry, and says that government procurement has been changed, “so we can buy British when it is essential for national security”.

Mansion tax surcharge of £2,500 a year for £2 million homes

12:54 , Jonathan Prynn

From April 2028, owners of properties identified as being valued at over £2 million by the Valuation Office in 2026 prices will be liable for a annual charge on top existing council tax liability. There will be four price bands with the surcharge rising from £2,500 for a property valued in the lowest £2 million to £2.5 million band, to £7,500 for a property valued in the highest band of £5 million or more, all raised by CPI inflation each year

ISA allowance kept at £20,000 - but must include £8,000 for investment

12:49 , Jonathan Prynn

ISA annual allowance kept at £20,000 so long as £8,000 of it is for investment. Over 65s retain the full cash allowance.

Today's budget - the key points

12:49 , Tom Place

The Labour Chancellor has announced a series of measures to tackle the cost-of-living crisis affecting so many households in Britain.

As millions of people across the country try to understand how they will be impacted by the Budget, you can read all about the key points here, from Political Editor Nicholas Cecil.

Confirmation of the news came before Chancellor Rachel Reeves had delivered her Budget in Parliament (James Manning/PA) (PA Wire)

Income tax on rent goes up 2%

12:47 , Jonathan Prynn

Income tax on rents is increased by 2% at every band to 22%; higher rate to 42% and additional rate to 47%

Reeves: "We’ve been building growth in our economy"

12:45 , Tom Place

“We beat the forecasts this year and we will beat them again: Boosting trade, not blocking it. Increasing investment, not cutting it. Championing innovation, not stifling it. Backing working people, not making them poorer.

“Brick by brick we’ve been building growth in our economy. Building roads, building homes, Getting spades in the ground and cranes in the sky.”

Reeves - "No return to austerity"

12:41 , Tom Place

Rachel Reeves: “I said there would be no return to austerity, and I meant it: This Budget will maintain our investment in our economy and our National Health Service.

“I said I would cut the cost of living, and I meant it. This Budget will bring down inflation and provide immediate relief for families. I said that I would cut debt and borrowing, and I meant it. Because of this Budget, borrowing will fall as a share of GDP in every year of the forecast.

“Our Net Financial Debt will be lower by the end of the forecast than it is today, and I will more than double the headroom against our stability rule to £21.7 billion – meeting our stability rule and meeting it a year early.”

(House of Commons/UK Parliament/PA Wire)

More from Rachel Reeves

12:38 , Tom Place

“Today’s Budget builds on the choices we have made since last July. To cut NHS waiting lists. To cut the cost of living. And to cut the debt and borrowing.

“No doubt, we will face opposition again. But I have yet to see a credible, or a fairer alternative plan for working people. These are my choices – the right choices for a fairer, a stronger, and a more secure Britain.”

Rachel Reeves begins her Budget statement

12:36 , Tom Place

Rachel Reeves has begun her statement, calling the early OBR leak “deeply disappointing and a serious error.”

Almost one million more higher rate taxpayers as freeze extended

12:33 , Jonathan Prynn

OBR says Freezing tax thresholds raises £8 billion in2029-30 and contributes to around 780,000 more basic-rate, 920,000 more higher-rate, and 4,000 more additional-rate taxpayers by 2029-30 than previously forecast

OBR blame leak on "techincal error"

12:29 , Tom Place

The OBR have apologies for the budget leak, blaming the early post on a “technical error,” and initiating an investigation.

An official statement said: “We will be reporting to our Oversight Board, the Treasury, and the Commons Treasury Committee on how this happened, and we will make sure this does not happen again.

“Our Economic and fiscal outlook and supporting documents will be released when the Chancellor has finished her speech.”

GDP growth stuck in slow lane until 2030

12:26 , Jonathan Prynn

GDP growth set to stay stuck well below 2% through to the next election says OBR

OBR Chaos

12:25 , Tom Place

OBR leak confirms fuel duty freeze and 'mansion tax'

12:23 , Tom Place

The OBR document leak appears to confirm some further expected measures.

It confirms that fuel duty will be frozen at its current rate until September 2026.

It also confirms a new ‘mansion tax’ for houses worth more than £2m, listing "a high value council tax surcharge on properties worth over £2m, raising £0.4bn".

Council tax surcharge on properties worth more than £2m

12:22 , Jonathan Prynn

OBR confirms “high value council tax surcharge on properties worth over £2 million”, raising £400 million a year

Public spending raised by £22 bn says OBR

12:20 , Jonathan Prynn

Budget raises public spending by extra £22 billion says OBR with an increase in disability caseloads boosting projected spending on welfare by £8 billion by 2029-30. Higher inflation and interest rates increase debt interest spending by £4 billion by 2029-30.

Budget raises extra £26 billion of tax by 29/30

12:16 , Jonathan Prynn

Budget raises extra £26 billion of taxes by 2029-30, through freezing personal tax thresholds and a host of smaller measures. Brings the tax take to an all-time high of 38 per cent of GDP in 2030-31

GBP to grow less than expected

12:15 , Tom Place

Real GDP is forecast to grow by 1.5 per cent on average over the forecast, 0.3 percentage points slower than we projected in March, due to lower underlying productivity growth.

12:13 , Jonathan Prynn

OBR says in leaked forecasts unemployment rate is expected to remain close to its current rate of around 5 percent until 2027

Badenoch attacked "chaotic" OBR leaks

12:10 , Tom Place

Kemi Badenoch has said that the build up to the budget has been the "most chaotic" in living memory.

She is referencing the early release of the OBR's analysis, asking Starmer if he has an explanation for the "complete shambles".

PMQs address the budget

12:08 , Tom Place

Sir Keir Starmer has confirmed that rail fares are being frozen, and that the minimum wage is going up.

Conservative leader Kemi Badenoch has paid tribute to the protesting farmers.

OBR publishes Budget measures early in error

12:05 , Tom Place

The OBR forecasts seem to have leaked, with Reuters snapping the below:

UK’S OFFICE FOR BUDGET RESPONSIBILITY OUTLOOK: REAL GDP IS FORECAST TO GROW BY 1.5 PER CENT ON AVERAGE OVER THE FORECAST, 0.3 PERCENTAGEPOINTS SLOWER THAN WE PROJECTED IN MARCH, DUE TO LOWER UNDERLYING PRODUCTIVITY GROWTH

UK OBR ECONOMIC AND FISCAL OUTLOOK: BUDGET TAX RISES RAISE 26.1 BLN STG BY 2029-30

UK OBR: CENTRAL GOVERNMENT NET CASH REQUIREMENT EX NETWORK RAIL 149.2 BLN STG 2025-26

UK OBR: CUTS MEDIUM-TERM PRODUCTIVITY GROWTH FORECAST TO 1.0 PCT FROM 1.3 PCT

UK OBR: FREEZING PERSONAL TAX THRESHOLDS RAISES 8.0 BLN STG IN 2029-30

UK OBR: NICS ON SALARY-SACRIFICE PENSIONS RAISES 4.7 BLN STG IN 2029-30

The current budget surplus margin has risen to £21.7bn in the OBR’s new forecasts, up from the £9.9bn forecast in March.

Bond investors had hoped to see an increase in the headroom, and they are piling into UK government bonds, driving down the cost of borrowing.

The yield on 10-year gilts has fallen by 5 basis points (0.05 of a percentage point) to 4.44%.

Rachel Reeves leaves Downing Street

12:00 , Tom Place

The Chancellor has now left 11 Downing Street - here she is with her team, holding the ministerial red box.

Chancellor Rachel Reeves poses outside 11 Downing Street with her team and ministerial red box (James Manning/PA) (PA Wire)

Chancellor Rachel Reeves leaves 11 Downing Street (James Manning/PA) (PA Wire)

Stock Market rise ahead of budget

11:40 , Tom Place

The London stock market has opened a little higher today ahead of the budget.

Financial markets are currently calm - you can follow along with the latest markets updates here.

Chancellor Rachel Reeves is reportedly planning to announce a three-year stamp duty holiday on new UK stock market listings in Wednesday’s Budget as the Government looks to boost the flagging London market (Jeff Moore/PA) (PA Archive)

A reminder of what to expect

11:34 , Tom Place

Ahead of the Budget announcement in around an hour’s time, here is a reminder of some of the measures the Chancellor is expected to make:

  • Income tax: Rachel Reeves is expected to extend the existing freeze on the income tax thresholds for another two years.
  • Increase in minimum wage: From next April, the National Living Wage will rise by 4.1% to £12.71 an hour for eligible workers aged 21 and over, while the National Minimum Wage rate for 18 to 20-year-olds will increase by 8.5% to £10.85 an hour.
  • Rail fares: Expected to be frozen in the Budget, saving some commuters over £300 a year.
  • Prescriptions: NHS prescription costs in England expected to be frozen at £9.90.
  • Tax for electric vehicles: The Chancellor is thought to be considering a 3p per mile tax for EVs as people shift away from petrol and diesel.
  • Freezing fuel duty: It is expected that the Chancellor will announce she is retaining the 5p cut in fuel duty introduced in 2022, and ensure it does not rise in line with inflation.
  • Tax hike on high-value homes: A possible new levy applied to some of the most valuable homes, in what has been dubbed by some a "mansion tax".
  • Salary sacrifice: The Chancellor could introduce limits on how much employees can stash in their pensions under salary sacrifice schemes before becoming subject to national insurance.
  • Two-child benefit cap: Ms Reeves is expected to scrap the limit that restricts child tax credit and universal credit to the first two children in most households.

You can read more details on what to expect here.

Burgon pleased that the Budget will be "focused on the cost of living crisis"

11:24 , Tom Place

Labour MP for Leeds East Richard Burgon has told BBC Radio 5 Live he is pleased the Budget will be focused on the cost of living crisis while wanting to see "a wealth tax on the very richest".

Burgon wants to see a lift on the two-child benefit cap, universal free school meals, and action on energy bills, while welcoming minimum wage increases.

"People can’t afford the basics, like food and energy bills," Burgon said.

He added that he has long been campaigning for "an approach of taxing wealth, not workers".

Labour MP for Leeds East Richard Burgon (Jane Barlow/PA) (PA Archive)

Tractors descend on London

11:14 , Tom Place

Will Stamp Duty be scrapped?

11:07 , Tom Place

Rachel Reeves is rumoured to be considering scrapping the stamp duty tax in the Autumn Budget.

Stamp duty land tax (SDLT) is currently paid when purchasing any home above £125,000 in England and Northern Ireland.

The idea of abolishing stamp duty resurfaced in October when Conservative Party leader Kemi Badenoch’s pledge to abolish stamp duty should the Tories form the next government received a standing ovation at the annual party conference and was broadly welcomed by the property industry.

Read the full story from Homes & Property Deputy Editor Meghann Murdock here.

Chancellor Rachel Reeves (Justin Tallis) (PA Wire)

Cabinet arrive at Downing Street

10:53 , Tom Place

A number of Keir Starmer's cabinet have arrived at Downing Street ahead of today's Budget.

Health Minister Wes Streeting (Getty Images)
Chief Whip Jonathan Reynolds arrives at Downing Street (Stefan Rousseau/PA Wire)
Home Secretary Shabana Mahmood (REUTERS)
Energy Secretary Ed Miliband (Getty Images)
Transport Secretary Heidi Alexander (REUTERS)
Chief Secretary to the Prime Minister Darren Jones (Getty Images)

Rachel Reeves on X this morning

10:41 , Tom Place

The Autumn Budget - a timeline

10:32 , Tom Place

Chancellor Rachel Reeves will deliver the Budget speech in the House of Commons in Parliament at around 12:30, after Prime Minister’s Questions.

Conservative leader Kemi Badenoch will then deliver her response, after which MPs will debate the Budget, a process which can go for several days.

The government will then introduce a Finance Bill to turn the proposals into law.

Rachel Reeves will deliver her Budget on Wednesday (PA) (PA Archive)

Tractors cause travel chaos - latest updates

10:13 , Tom Place

A farmer’s protest has caused serious disruption this morning, as tractors, some draped in Union Flags and St George's Crosses, made their way to the capital.

Farmers protesting against UK inheritance tax reforms were banned from bringing their tractors to the area, but defied the ban.

Last year, Rachel Reeves introduced measures to apply an inheritance tax of 20 per cent to agricultural property valued over £1m.

Follow the latest travel updates here.

Tractors appeared on Whitehall ahead of Chancellor Rachel Reeves’s Budget speech (Jordan Pettitt/PA) (PA Wire)

Follow The Standard's Political Editor Nicholas Cecil for the latest updates

10:04 , Tom Place

How the 'Mansion tax' would impact London homeowners

09:58 , Tom Place

There has been speculation that Rachel Reeves may introduce a so-called “mansion tax” on properties valued over £2 million in today’s budget.

Homeowners would potentially be required to pay a one per cent annual levy on the value above this level, which would disproportionately target London homeowners, where two-thirds of the qualifying transactions happened this year.

Owners of properties worth £2.5 million would pay an extra £5,000 a year in tax, while owners of a £3 million home would need to pay £10,000 annually.

It’s expected that the tax would be added to council tax bills.

Read the full story from Emma Magnus here.

Rachel Reeves urged to avoid a ‘Del Boy Trotter’ Budget

09:43 , Tom Place

Rachel Reeves must avoid a ‘Del Trotter’ ‘no income tax, no VAT, no money back, no guarantee!’ Budget if she wants to tackle the fiscal black hole, according to Andrew Sanford, a partner at the audit, tax and business advisory firm, Blick Rothenberg.

Sanford has said that the budget can’t have these increases if the chancellor wants to tackle the fiscal black hole, rumoured to be between £40 billion to £60 billion depending on the OBR’s productivity downgrade to come.

Read more from Andrew Sanford here.

Chancellor of the Exchequer Rachel Reeves (Carl Court/PA) (PA Wire)

Income tax rate will not rise, signals minister - but millions of families 'face £1,600 hit'

09:04 , Claudia Lee

Rachel Reeves will not raise the rate of income tax, a minister has signaled hours before the Budget.

Chief Secretary to the Prime Minister Darren Jones made clear that the Labour Government has ruled out an increase in the income tax rate.

But he left open the door to the freeze on the thresholds for paying income tax to be extended by another two years.

If the Chancellor carries on the freeze for another two years, millions of people, including 2.6 million in the capital and wider South East, will have been dragged into paying higher rates of income tax by 2029/30.

This contrasts with the speech made by Ms Reeves earlier this month where she strongly signaled that the income tax rate would rise.

Read the full story from The Standard’s Political Editor Nicholas Cecil here.

Chief Secretary to the Prime Minister Darren Jones (PA Wire)

Keir Starmer says Budget will cut cost of living, waiting lists and national debt

08:40 , Claudia Lee

Keir Starmer has said today’s Budget is about taking “fair choices”.

In a post on X this morning he said: “It will focus on your priorities: cutting the cost of living, cutting waiting lists and cutting the national debt.”

The Government will “deliver strong foundations for our economy and secure our country’s future”, he added.

Hospitality bosses hit out at above inflation hikes in minimum wage next year

08:21 , Claudia Lee

Hospitality bosses have hit out at the above-inflation minimum wage increases announced for this April.

The Government announced today that the National Living Wage will rise by 4.1% to £12.71 an hour next year, while the rate for 18 to 20 year olds will go up by a higher than expected 8.5% to £10.85.

The rise will mean that the minimum wage for the 18 to 20 age group will have gone up by more than 65% in five years.

Trade body UKHospitality said the wage increases loaded an extra £1.4 billion in additional costs on the industry already suffering a bigger jobs shake out than any other sector.

Read more from The Standard’s Business Editor Jonathan Prynn here.

Kate Nichols, chair of UKHospitality (UKHospitality)

Rachel Reeves will announce the Budget today: Here's what to expect

08:12 , Claudia Lee

We won’t know what’s in the budget for sure until Rachel Reeves makes her announcement at noon.

But here are some of the measures the Chancellor is expected to make.

  • Income tax: The measure was dropped after the Treasury apparently received forecasts from the budget watchdog that were not quite as grim as first feared. Instead, Ms Reeves is expected to extend the existing freeze on the income tax thresholds for another two years.
  • Increase in minimum wage: The Government has announced that from next April, the National Living Wage will rise by 4.1% to £12.71 an hour for eligible workers aged 21 and over. The National Minimum Wage rate for 18 to 20-year-olds will increase by 8.5% to £10.85 an hour.
  • Rail fares: They will be frozen in the Budget, saving commuters on pricier routes more than £300 a year.
  • Prescriptions: The cost of an NHS prescription in England will be frozen at £9.90.
  • Tax for electric vehicles: The Chancellor is thought to be considering a 3p per mile tax for EVs as people shift away from petrol and diesel, and the fuel duty that brings in to the Exchequer.
  • Freezing fuel duty: According to reports, Ms Reeves will announce she is retaining the 5p cut in fuel duty, which was introduced in 2022, and ensure it does not rise in line with inflation.
  • EV buyer subsidy: She will add £1.3 billion to a grant that knocks up to £3,750 off the price of an electric vehicle as part of a package that will also see £200 million go towards the rollout of charging points.
  • Tax hike on high-value homes: A new levy could be applied to some of the most valuable homes in what has been billed by some as a "mansion tax".
  • Salary sacrifice: The Chancellor might introduce limits on how much employees can stash in their pensions under salary sacrifice schemes before it becomes subject to national insurance.
  • Two-child benefit cap: As pressure has piled up, Ms Reeves is expected to scrap the limit that restricts child tax credit and universal credit to the first two children in most households.
  • Sugar tax: Health Secretary Wes Streeting announced this week that pre-packaged milkshakes and lattes will be subject to the sugar tax.

Tractors arrive in Downing Street for protest ahead of Budget

07:53 , Claudia Lee

The sounds of tractors honking their horns has been reported from Downing Street this morning.

Yesterday, the Met Police announced that farmers planning a protest in Westminster today would be banned from bringing their tractors.

But, images posted on X this morning show the first vehicles arriving.

The protest is against one of the most controversial measures in last year’s Budget - changes to how inheritance tax is applied to agricultural land.

One user posted: “The first of the Tractors arriving in London this morning despite the imposed Tractor ban last night. Lloyd Baker from Hastings, the first Farmer in Whitehall this morning .”

Read more about this story here.

A tractor from the Littledown Christmas Tree Farm arrives for a protest by farmers in Whitehall this morning (Harriet Tolson/PA Wire)
Farmers protest in tractors at Westminster (Jordan Pettitt/PA Wire)

Chancellor says public 'angry at unfairness' ahead of Budget

07:15 , Michael Howie

Rachel Reeves acknowledged people are "angry at unfairness" in the British economy in a filmed address ahead of unveiling her second Budget later today.

The Chancellor said the Government had started to see results in the past year with "wages rising faster than inflation, hospital waiting lists coming down, and our economy growing faster and stronger than people expected".

"But I know there is more to do," she said. "I know that the cost of living is still bearing down on family finances, I know that people feel frustrated at the pace of change, or angry at the unfairness in our economy.

"I have to be honest that the damage done from austerity, a chaotic Brexit and the pandemic were worse than we thought.

"But I'm not going to duck those challenges, and nor will I accept that our past must define our future. It doesn't have to."

Watch the full address here:

Rachel Reeves to hammer London in Budget tax grab on homeowners and workers

07:02 , Andy Beill

Rachel Reeves will clobber London in a multi-billion pound Budget tax raid with owners of expensive properties and millions of workers set to be hit.

The Chancellor’s plans will also see 260,000 children in the capital benefit from the lifting of the two-child welfare cap.

Read more from The Standard’s Political Editor Nicholas Cecil here.

Budget 2025: Reeves to hammer London in tax grab on wealthy homeowners and workers

Key measures that are anticipated to be announced tomorrow

Tuesday 25 November 2025 21:12 , Nuray Bulbul
Rachel Reeves will deliver her Budget tomorrow (PA Archive)

Freezing of income‑tax thresholds rather than raising headline rates, as a way of generating additional revenue.

Introduction of a number of smaller tax increases or new levies, rather than a major increase in the basic income‑tax or VAT rates.

A cap on salary‑sacrifice pension contributions (for example reportedly £2,000 per year) before National Insurance applies.

Applying National Insurance contributions to rental income as a potential new revenue stream.

Removing exemption for milk‑based drinks (such as pre-packaged milkshakes and lattes) from the sugary‑drinks tax, while excluding “open‑cup” café/restaurant drinks.

Giving mayors and local government the power to introduce a modest tourist tax on overnight stays in certain cities or regions.

Chancellor Reeves to limit salary sacrifices in Budget

Tuesday 25 November 2025 20:21 , Nuray Bulbul

The Chancellor is reportedly planning to set limits on how much employees can contribute to salary sacrifice schemes before National Insurance applies.

Commonly linked to pension plans, these schemes allow workers to save for retirement in a tax-efficient way.

Sources indicate the cap could be set at £2,000 per year, potentially reducing the amount individuals can add to their pension funds.

This change may also affect take-home pay for those using the scheme to remain within a lower tax bracket.

Click here to read the full blog on The The Standard's website

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