The Labour Party said it aimed to fill the £22bn black hole it claimed the Tories left it at Downing Street.
In the build-up, Keir Starmer also promised not to punish ‘working people’ ahead of the speech, but he warned taxpayers “it’s time to embrace the harsh light of fiscal reality”.
While there were no major white rabbits plucked out of the hat, was it as scary a Halloween trick as many predicted?
With plenty of changes announced across the board, here are the key points that’ll impact your finances.
1. Inheritance tax
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The rate of inheritance tax will remain at 40% for estates worth up to £325,000 for a further two years until 2030, but pensions will be included in 2027.
For agricultural and business properties, the 100% tax relief for the first million pounds of assets will remain, but a 50% rate will be introduced on anything after that. From April 2026, the rate of business property relief will go down to 50% for companies not listed on a recognised stock exchange
2. Capital gains tax
As mooted by the Labour Party, capital gains tax rose for sales of assets by investors, with the lower rate rising from 10% to 18% and the higher rate up from 20% to 24%.
This keeps the levels in line with what landlords have to pay when selling a buy-to-let (BTL) property, which was frozen at the same rates.
Reeves said: “The UK will still have the lowest capital gains tax rate of any European G7 economy.”
3. National Insurance contributions
The first female Chancellor confirmed another mooted increase, which was National Insurance contributions (NICs) increasing for employers.
This will go up by 1.8% to 15% from April 2026, while the salary threshold per employee for when they pay it will reduce from £9,100 to £5,000 per year.
To “protect small businesses”, the Chancellor added that the Employment Allowance will more than double to £10,500 and the National Insurance liability of less than £100,000 criteria will be scrapped.
4. Fuel duty
The freeze to fuel duty will continue for another year, as will the 5 pence per litre (ppl) temporary cut. This decision is predicted to save the average driver around £60 per year on fuel.
Reeves said: “I have concluded that in these difficult circumstances, while the cost of living remains high and with the backdrop of global uncertainty, increasing fuel duty next year would be the wrong choice for working people.”
5. Stamp duty
One surprise was that stamp duty will increase from 3% to 5% on second homes as of tomorrow. This will cost landlords £7,000, based on the average price of a property (£371,958), according to Rightmove’s data.
Peter Stimson, head of product at MPowered Mortgages, said: “Buy-to-let landlords and second homeowners were expecting another tax squeeze from the Chancellor.
“But what they got was a whack with a hammer.”
6. Carer’s Allowance
There’s a boost for carers, who will see the weekly earnings limit for Carer’s Allowance surge to £181 per week, making it the equivalent of 16 hours of the National Living Wage.
The change will make more than 60,000 carers eligible for support and help those who balance work and caring responsibilities.
7. Benefit support
The Household Support Fund and Discretionary Housing Payments will extend into the 2025-26 tax year for people in immediate hardship and crisis. This payment is administered by local authorities to help those households in need.
Reeves also confirmed a new Fair Repayment Rate, which caps debt repayments made in Universal Credit, allowing over a million households to keep more of their Universal Credit cash.
8. Income tax thresholds
The freeze on income tax and NIC thresholds will be thawed in 2028. Reeves said she hopes the decision to halt a Conservative decision introduced in March 2021 “will protect working people from being dragged into higher tax brackets”.
The rates will be uprated based on inflation for the 2028-29 financial year.
9. Affordable housing
Reeves has pledged to add £500m to boost the existing Affordable Homes Programme to reach a total of £3.1bn, with the expectation of delivering an extra 5,000 homes.
In other homeowner support, there will be a £3bn injection to small and medium enterprise (SME) housebuilders and the Build to Rent sector in the form of housing guarantee schemes to support the private housing market.
10. Private school fees
As mooted by the Government before the Budget speech, Labour will introduce a 20% VAT on education and boarding services provided by private schools from 1 January 2025.
Business rates’ charitable rate relief from private schools in England from April 2025 will also be removed, which the Chancellor said will fund programmes relating to education and young people.
11. Non-dom regime
The existing non-dom regime will be scrapped from April 2025 and replaced with a new residence-based regime, designed to “attract investment and talent to the UK”.
Reeves said: “If you earn your money here, you should pay your taxes here too.”
