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Rachel Reeves will announce Labour’s first Budget since coming into power on 30 October, leading one of the most anticipated fiscal events in over two decades.
Ahead of her announcement, speculation has grown that the chancellor will make major changes to inheritance tax and close a loophole that is worth around £30 million a year.
The rules around gift-giving allowances mean individuals are able to give away £74 million tax-free during their lifetimes, provided they follow certain rules. An estimated £60,000 is saved in tax for each family that takes advantage of the rule, per year.
Meanwhile, Sir Keir Starmer is attending the Commonwealth Heads of Government Meeting (Chogm) in Samoa, where he has issued a stark rallying call regarding the upcoming fiscal event.
“We are going to tackle the inheritance in this Budget,” he said, adding: “I’m not prepared to walk past it.
“I’m not prepared to put it off and that is a signal of the way I want to do business which is not to pretend our problems aren’t there, it’s to actually roll up our sleeves and deal with it.
We’ll be bringing you all the latest updates ahead of the big event on 30 October here, on The Independent’s liveblog.
Key Points
- Streeting refuses to rule out income tax threshold freeze
- When is the 2024 Budget and what might be in it?
- Government will keep manifesto pledges, says Starmer
Budget will ‘face up’ to black hole in public finances, Keir Starmer vows
Sir Keir Starmer has said the Budget will “face up” to the reality of Labour’s inheritance from the Conservatives as Rachel Reeves prepares to borrow tens of billions of pounds to invest in Britain’s crumbling infrastructure.
Ahead of the party’s first Budget in 15 years, the prime minister promised to tackle the hole left in Britain’s public finances and give the public “a sense of how we intend to do business” going forward.
Budget will ‘face up’ to black hole in public finances, Keir Starmer vows
Rachel Reeves’ Budget is expected to be a mixed bag, with deep spending cuts and sharp tax rises offset by a debt-funded spending spree of tens of billions
Archie Mitchell24 October 2024 11:30 1729761217How could a change to debt rules ‘unlock’ £50bn for Labour?
Rachel Reeves will reportedly unveil a major change to Labour’s fiscal rules at the budget on 30 October by borrowing billions for infrastructure investment.
Following weeks of speculation, the chancellor will reveal her plans to change Britain’s debt rules at the International Monetary Fund’s (IMF) annual meeting in Washington on 24 October.
There’s a few ways she could do this – here’s everything you need to know:
How Reeves might unlock £57 billion at the budget in ‘simple’ fiscal rule change
Experts have urged the chancellor to consider tweaking a Labour manifesto pledge
Albert Toth24 October 2024 10:13 1729759942Reeves confirms disposable vape ban as new taxes still on the cards
The sale of disposable vapes will be banned in England and Wales from next year.
Under legislation laid out by the Labour government in Parliament, it will be illegal for retailers to sell the devices from 1 June 2025.
It has been reported that Rachel Reeves is also considering raising the tax further as part of her Budget to be unveiled at the end of the month.
Labour has already outlined its ambition to reduce the amount of young people smoking or vaping, bringing in new rules as part of the Tobacco and Vapes Bill.
Labour’s war on vaping explained: From disposable ban to higher taxes
Disposable vapes will be banned from sale in England and Wales from 1 June, 2025 - as Labour reportedly considers increasing a incoming tax on vaping products
Albert Toth24 October 2024 09:52 1729749600ICYMI: Reeves considers ‘Amazon tax’ in business rates reform drive
The chancellor is reportedly considering a new ‘Amazon tax’ that would see business rates paid my online tech giants increased.
Industry sources understand that a consultation will be launched after Ms Reeves announces the Budget on 30 October. This means the plans may get a mention.
It comes after Labour wrote in its manifesto that it would reform the business rates system to “level the playing field between the high street and online giants.”
The manifesto added that the current system “disincentivises investment, creates uncertainty and places an undue burden on our high streets.”
Albert Toth24 October 2024 07:00 1729738800Budget rumours: Inheritance Tax reform
Inheritance tax is a levy on the estate of someone who has died. This is their property, money and possessions. Crucially, it is not paid if the value of these things is below £325,000.
The tax rate is 40 per cent, but it’s only charged on the part of the estate that’s above the threshold. In 2023/24, only 5 per cent of deaths generated an inheritance tax bill, raising around £7 billion.
However, the IFS writes that the tax measure “is littered with special exemptions”. These include a business relief, the ability to pass on agricultural land tax-free, and the tax-free passing on of pension pots.
The economic think tank says that ending these measures alone would raise £4.8bn a year by 2029.
Albert Toth24 October 2024 04:00 1729728000ICYMI: Rachel Reeves boosted by big drop in inflation as she seeks £40bn in Budget tax rises
Rachel Reeves has been boosted by a sharp drop in inflation as she seeks to find £40bn of tax hikes and spending cuts in this month’s Budget.
The chancellor will welcome the dip, which saw inflation fall under the Bank of England’s 2 per cent target for the first time in more than three years, as she prepares for what promises to be a brutal Budget.
Rachel Reeves boosted by big drop in inflation as she seeks £40bn in Budget tax rises
The fall in inflation comes as Rachel Reeves looks for £40bn of spending cuts and tax hikes in the October 30 Budget
Albert Toth24 October 2024 01:00 1729717200Budget rumours: Taxing pension savings
Pension tax relief is a reduction of the amount of tax paid on private pensions. It helps workers save for retirement by boosting their pension pots.
The amount of tax relief a person is granted is based on their income tax. It will effectively cancel out tax on pension contributions up to a maximum of £60,000.
After this, contributions will be taxed at either 20, 40, or 45 per cent, depending on which income tax rate the worker falls into.
However, the chancellor is thought to be considering a flat 30 per cent pension tax relief rate. This would mean that higher earners would effectively pay 10 per cent in tax, while those on the additional rate would pay 15.
The measure would raise around £3 billion a year, with 7 million earners paying more tax. But it would be better news for basic rate earners, who would actually begin to receive a 10 per cent boost to their pension contributions.
Evaluating the idea last year, the IFS said it would “redistribute the burden of taxation from the bottom 80 per cent to the top 20 per cent of earners.”
Albert Toth23 October 2024 22:00 1729706400ICYMI: Millionaires urge Reeves to raise £14bn from capital gains tax changes at Budget
Rachel Reeves should increase capital gains tax (CGT) at Labour’s upcoming Budget, a group of millionaire business owners have urged, estimating the measure would raise £14bn a year.
In a report by the IPPR think-tank, analysts have consulted with wealthy entrepreneurs who say higher CGT would not have stopped them from making investments in the UK.
Millionaires urge Reeves to raise £14bn from capital gains tax changes at Budget
Government analysis has previously all but ruled out the measures
Albert Toth23 October 2024 19:00 1729695600Budget rumours: Capital Gains reform
Capital Gains Tax (CGT) is paid on the profit made when an asset which has increased in value is sold. It is applied to things like the sale of personal possessions worth more than £6,000 (apart from a car), property that’s not the seller’s main home, shares and business assets.
It is charged at 10 or 18 percent for basic rate taxpayers, and 20 or 24 for higher or additional rate earners. There is a tax-free allowance of £3,000.
There are several ways CGT could be changed. In the run-up to the election, the Lib Dems and Greens both said they would rethink the tax bands to be more similar to income tax, raising an estimated £5.2bn a year.
Albert Toth23 October 2024 16:00 1729691065ICYMI: Wes Streeting warned inflation-busting NHS Budget deal will not be enough
Fears have been raised that Wes Streeting’s inflation-busting funding deal for the NHS will not be enough for him to pay for the reforms he wants to drive through.
Sources have told The Independent that the Department for Health and Social Care is set to get about 4 per cent – between £7bn and £8bn – as Mr Streeting confirmed that he has mostly agreed his settlement with chancellor Rachel Reeves. Inflation is currently running at 1.7 per cent.
Wes Streeting warned inflation busting NHS Budget deal will not be enough
Health experts urge the government to find more money to tackle waiting lists and improve NHS care
David Maddox23 October 2024 14:44 Newer1 / 5OlderDisclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
