We can only hope that the £70bn each year of extra spending delivers growth. To pay for this, half will come from taxes the rest from borrowing.
Hopefully this will not increase inflation as if it does the BoE Bank Rate may stay high.
There are 71 policy notices, here are the key ones that affect you:
The largest burden falls on the employers’ National Insurance (NI)
From 6 April 2025 the main rate of Class 1 employers NI contributions will increase to 15% from 13.8%. Also the secondary threshold will be reduced to £5,000 from £9,100 bringing more employees into the net.
The Class 1 employee NIC is held at 8% and 2% above £50,270.
Class 4 self-employed NIC has been held at 6% and 2% above £50,270.
Income tax
The personal allowances for 2025/26 will remain at £12,570 and the higher rate threshold will stay at £50,270.
The dividend allowance will remain at £500 for 2025/26 and the rates of tax on dividends will also be unchanged.
Inheritance tax (IHT)
The inheritance tax nil rate band of £325,000 has not changed, neither has the residence nil rate band of £175,000.
However business relief will be attacked from April 2026. The government has introduced a threshold of £1 million and over that limit there will 50% relief, meaning an effective rate of 20%. Investing in AIM shares the IHT relief has been also reduced to 50% and therefore will be subject to 20% IHT.
The government will bring unused pension funds and death benefits payable from a pension into a person’s estate for inheritance tax purposes from 6 April 2027. However, as this is very complex they have started a review on how to implement it.
Capital gains tax (CGT)
The rate has been increased today to 18% from 10% for non and basic rate taxpayers and to 24% from 20% for high rate taxpayers. Bringing the gain on the disposal of shares to be in line with property.
The 0% SDLT band for first time and other property buyers will end on 31 March 2025.
The annual Capital Gain Tax exemption of £3,000 remains.
Stamp Duty Land Tax (SDLT)
The additional dwellings SDLT surcharge on second homes and buy-to-let properties has been increased to 5% from 3% from today.
The threshold of the 0% SDLT band for residential property will be cut to £125,000 from 1 April 2025. The 0% band for first time buyers will be reduced down to £300,000 from 1 April 2025.
VAT – private school fees
The government will introduce VAT at 20% on private school fees from January 2025.
ISA allowances
The limits have not changed. £20,000 for ISAs, £4,000 for Lifetime ISAs, £9,000 for junior ISA and Child Trust Funds.
Pensions
Income Tax relief on personal pension contributions remains unchanged. Annual allowance also remains unchanged at £60,000.
Tax-free lump sum allowances remain unchanged. The Lump Sum and Death Benefit Allowance of £1,073,100 and Lump Sum Allowance of £268,275 remain unchanged.
The 4.1% increase in state pensions will hopefully make up for the loss of the winter fuel payment.
Corporation Tax
The main rates remain at 25% and 19% for companies meeting the small profit threshold of £50,000.
The marriage allowance
This allowance has not changed. If one spouse has income below £11,310 (£12,570 – £1,260) you can transfer £1,260 of your personal allowance between couples. If you believe that you may qualify it can be back dated to 2020/21.
Furnished Holiday Lettings (FHL)
The FHL tax regime will be abolished from April 2025. The effect will be that FHL properties will be subject to the same rules as non-furnished holiday let property businesses.
National Living and Minimum Wage
From April 2025 the NLW will be increased to £12.21 and NMW for 18-20 year olds to £10 per hour.
High Income Child Benefit Charge (HICBC)
The HICBC tax charge start to be charged above £60,000. The government is not planning to reform the tax.
Non-UK domiciled individuals
From April 2025 changes will be made to replace the remittance basis of taxation with a shift to residence as the determining factor.