Rachel Reeves has launched a £26 billion tax raid on Britain in her second Budget.
She risked 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.
But the Labour Chancellor also announced a series of Budget giveaways.
So who are the winners and losers from her fiscal plans?
The Budget means that many people will pay higher taxes but other individuals will benefit from some of the new measures.
Losers:
•Millions of people, including more than 2.6 million in the capital and wider South East, will have been dragged into paying higher rates of income tax by 2030/31 after the Chancellor extended the Tory six-year freeze on the thresholds for paying this levy by another three years. Millions more will end up paying more income tax under the stealth levy even if they do not go into a higher rate band as they pay more tax as their wages rise.
•Homeowners of properties worth more than £2million are being hit with a new levy from 2028 which has been called a “mansion tax”. The new charge will be an annual £2,500 charge for properties worth more than £2m, and will rise to £7,500 for properties worth more than £5m. The policy will impact hardest on London.
• Workers saving into a private pension under a salary sacrifice scheme are being hit with new restrictions. There will be a £2,000 cap on salary sacrifice into a pension with contributions above that taxed in the same way as other employee pension contributions.
• £2.1 billion will be raised by the Treasury through increasing tax rates on dividends, property and savings income by two percentage points
• Hospitality chiefs are warning that a rise in the National Living Wage is part of “seemingly endless additional costs” which will impact on pubs, hotels, clubs and cafes.
• Drivers of electric cars are being hit by a pay-per-mile scheme. Drivers will be charged at 3p per mile for electric cars and 1.5p for plug-in hybrids.
•Tourists and other visitors to London and some other cities will be charged a new levy to stay overnight in a hotel or Airbnb-style accommodation.
Winners:
• Average household energy bills are set to fall by £150 by next April, Ms Reeves pledged after she ditched and ECO scheme introduced by the Conservatives.
• Around 500 of the UK’s most energy-intensive businesses are set to save up to £420 million per year on their electricity bills from next April under plans to increase the discount on electricity network charges for companies in sectors like steel, cement, chemicals and glass.
• A freeze on regulated rail fares, which includes season tickets, peak returns for commuters and off-peak returns between major cities, will save London commuters up to £350 a year.
•Workers on low pay will benefit from the National Living Wage rising from April 2026. It will go up for all workers aged 21 and over by 4.1 per cent to £12.71. The minimum wage for 18-20 year olds will increase to £10.85.
•Nearly 1.5 million children in England, including 260,000 in London, will benefit from the lifting of the two-child cap, at a cost of around £3 billion. The chancellor said it will lift 450,000 children out of poverty.
• The State pension will rise by an above-inflation 4.8% next April under the “triple lock”. The full new State pension will increase to just over £240 a week, a rise worth over £550 a year. The full basic State Pension is to rise by around an extra £440 a year. The State pension rises by the higher of inflation, 2.5% or average earnings which went up 4.8%.
•For drivers of petrol and diesel vehicles fuel duty is frozen at its current rate until September 2026.
•Patients will benefit from a freeze on NHS prescription charges, keeping the fee at £9.90 for a single prescription.
•All care leavers will become automatically eligible for full student loan support, worth up to £13,500, to offer them the opportunity to go to university.
