UK's First Female Chancellor Unveils Ambitious Autumn Budget

Rachel Reeves, the UK's first female Chancellor has unveiled the latest Autumn Budget, emphasizing "growth" as the top priority and pledging that economic growth will be the mission of this Parliament. Here are the key highlights from Lessel:

1. Tax Increases: The budget aims to raise an additional £40 billion in taxes, including a 1.2% rise in National Insurance contributions for employers from April 2025, expected to generate £25 billion annually.
2. Capital Gains Tax Increase: This applies to profits from the sale of assets, such as a second home or investments in stocks. The lower rate of Capital Gains Tax will rise from 10% to 18%, and the higher rate from 20% to 24%.
3. Stamp Duty on Second Homes: The surcharge for additional properties will increase to 5%, effective from tomorrow.
4. Inheritance Tax: The inheritance tax threshold freeze is extended to 2030. This means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if a residence is passed to direct descendants, and up to £1 million when passed to a surviving spouse or civil partner. Starting from April 2026, the first £1 million in business and agricultural assets will continue to be exempt from inheritance tax, with a 50% relief on any amount over £1 million, effectively reducing the rate to 20%. Inherited pensions will be subject to inheritance tax from April 2027.
5. Abolition of the Non-Dom Tax Regime: From April 2025, the non-domicile (non-dom) tax regime will be abolished. This applies to UK residents whose permanent home is outside the UK, meaning they currently do not pay UK tax on income earned abroad.
6. Minimum Wage and Social Security: The minimum wage will increase to £12.21 per hour from April 2025. The freeze on Carer's Allowance and fuel duty will continue.
7. VAT on Private School Fees: From January 2025, VAT will be applied to private school fees, and business rate relief for private schools will end in April 2025.
8. Stimulating Economic Growth: The government will invest £100 billion in capital spending over the next five years, including an additional £5 billion for housing construction, and confirms funding for the extension of the HS2 rail project to London Euston.
9. Supporting Healthcare and Social Infrastructure: The government announced a £22.6 billion increase in the "day-to-day health budget" to improve public services. Additionally, state pension spending is projected to rise by 4.1%.

In Labour’s first Autumn Budget statement in 14 years, the government’s intention to drive economic growth through these policies was criticized by Tory leader Rishi Sunak, who called the budget "an enormous borrowing spree." The Chancellor insists her plan will "boost long-term growth," while Labour’s most significant and challenging pledge remains achieving the highest sustained growth among G7 countries. The ongoing debate between Labour and the Conservatives highlights their differing priorities on fiscal management and economic growth.

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