Budget 24: The key points you need to know from Autumn Statement at a glance

Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street with traditional red box ahead of revealing Labour government's first budget
-Credit: (Image: Anadolu via Getty Images)


Chancellor Rachel Reeves has set out the first Labour Budget since 2010, which will increase taxes by £40bn amid a pledge to "fix the foundations" of the economy. She declared: "This is a moment of fundamental choice for Britain. I have made my choices. The responsible choices."

The Chancellor has raised taxes by £40bn. “Any chancellor standing here today would face this reality, and any responsible chancellor would take action,” she said.

Here are the main points from the Chancellor’s Budget:

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Tax, NI and minimum wage

National Insurance: Among measures are a 1.2% increase for employers’ National Insurance contributions to 15% in April 2025. The threshold for paying them will fall from £9,100 per year to £5,000.

On personal taxes: The Government will not extend the freeze on income tax and national insurance thresholds beyond 2027/28, saying it would “hurt working people” to keep thresholds frozen. National insurance, VAT or income tax will not increase for working people in this Budget.

Capital gains tax: The headline rates of capital gains tax will increase, with the lower rate rising from 10% to 18% and the higher rate from 20% to 24%.

Stamp duty: The stamp duty land tax surcharge for second homes will increase by two percentage points to 5%, and will come into effect from Thursday, the Chancellor added.

Inheritance tax: Changes to inheritance tax includes bringing pension pots within the tax from April 2027 and reforms to agricultural and business property reliefs, raising a total of £2 billion a year.

The freeze on inheritance tax brought in by the previous Government will be extended for a further two years, to 2030. Ms Reeves said: "That means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants, and £1 million when a tax-free allowance is passed to a surviving spouse or civil partner."

End to non-dom tax status: Ms Reeves announced that this status - which means claimants can avoid paying tax in the UK on overseas earnings - will be abolished. The Government plans to use this cash to help provide 40,000 extra NHS appointments every week.

Minimum wage: The national minimum wage will rise by 6.7% to £12.21 an hour after asking the Low Pay Commission to take the “cost of living” into account. The Government will move to a single level of the minimum wage, the Chancellor said, which will mean a flat rate for those 18 and above.

On inflation, ministers will maintain the MPC’s (Bank of England’s Monetary Policy Committee) target of 2%, as measured by the 12-month increase in the Consumer Prices Index.

NHS and health

Carers' allowance: The weekly earnings limit for carers allowance will rise to the equivalent of 16 hours a week at the national living wage, the largest increase since the allowance was introduced. It will mean a carer can now earn more than £10,000 while receiving the allowance. This means they can increase their hours while keeping hold of more of their earnings following widespread calls for reform.

Infected blood compensation: The Government will set aside £11.8bn to compensate those affected by the infected blood scandal and £1.8 billion to compensate victims of the Post Office Horizon scandal

NHS buildings cash: Ms Reeves said £1 billion will be allocated to upgrading NHS buildings which are in "disrepair". Ms Reeves also announced a £22.6 billion increase in the day-to-day health budget. She said a 10 year plan for the NHS will be published in the spring, and that the cash boost would enable the NHS to deliver 2% productivity growth next year.

Ms Reeves also announced that £1.5 billion will be spent on new surgical hubs and scanners, while £70million will be allocated for new radiotherapy machines. A further £1.5 billion will go towards new hospital beds in this year's Budget.

Education

VAT on private schools: The Chancellor confirmed that a loophole excluding private school fees from a 20% VAT charge. Labour said in its manifesto it plans to use this cash to help recruit 6,500 teachers in state schools. The Chancellor also said she would provide £6.7 billion of capital investment to the Department for Education next year - a 19% real-terms increase

Fixing crumbling schools: The Government has announced £1.4billion to rebuild crumbling schools and provide free breakfast clubs. This is intended to rebuild or refurbish around 500 schools over the next 10 years, and to to triple investment in free breakfast clubs to £30million in 2025-26. The Government will provide £2.1 billion more to improve school maintenance, £300 million more than this year. This will help deal with buildings affected by RAAC

Transport investment

Roads: The long-debated plan to dual a section of the A1 between Morpeth and Ellingham has been axed, with Ms Reeves describing it as 'unaffordable'.

Bus services: The fare cap for bus services across England will go up from £2 to £3. An additional £925million was also pledged to improve bus services across England during the 2025/26 financial year. Local authorities will be able to use the extra money to bring in new bus routes, make services more frequent and protect crucial services for local communities.

Electric vehicles: The Government will maintain incentives for electric vehicles in company car tax from 2028 and increase the differential between fully electric and other vehicles in the first year rates of vehicle excise duty from April 2025. Ms Reeves said this will raise around £400million.

Pothole repairs: £500million will be committed to road maintenance budgets next year, with an aim of repairing one million potholes every year

Air passenger duty: This will rise, adding up to £2 to the cost of an economy ticket for a short-haul flight. Private jet users will be hit by a 50% hike in APD, she added.

Rail and HS2: The Government is "committing the funding required" to begin tunnelling work to bring HS2 to London Euston station, Ms Reeves announced. Transpennine rail links will be upgraded between York, Leeds, Huddersfield and Manchester.

Ms Reeves also promised to deliver East-West rail between Oxford, Milton Keynes and Cambridge, with the first services running between Oxford, Bletchley and Milton Keynes next year and trains between Oxford and Bedford running by 2030.

Housing

The Government will invest more than £5 billion in housebuilding, and £1 billion of funding to remove dangerous cladding next year.

Social care and rough sleeping: The Chancellor said there would be at least £600 million in grant funding for social care and £230 million to tackle homelessness and rough sleeping

Tobacco and alcohol: A “flat rate duty” on vaping liquid will be introduced from October 2026. Taxes will also increase on tobacco. Meanwhile draught duty on alcoholic drinks will fall by 1.7%, meaning “a penny off a pint in the pub”.

Fuel duty: The 5p cut to fuel duty will be kept into next year, with Ms Reeves saying it would be the “wrong choice” to increase it. She said keeping the cut and freezing it again will cost £3 billion.

Devolution deals

Regions in Scotland and Northern Ireland will get new growth deals, and devolved nations will get the largest real-terms funding amount since devolution. Scotland will get an extra £3.4bn, Wales will get £1.7bn, and £1.5bn for Stormont in Northern Ireland.

Government funding

Ms Reeves said she is setting a “2% productivity, efficiency and savings target” for all Government departments next year. She promised a "significant real-terms funding increase" for local government next year - including £1.3 billion of additional grant funding to deliver "essential services".

The Government hopes to raise £6.5bn by giving HMRC new technology and hiring extra staff to crack down on £6.5bn in unpaid taxes.