In a significant economic announcement, Chancellor Rachel Reeves unveils her first Budget, presenting notable changes impacting businesses and workers.
- Reeves ensures no increase in National Insurance, VAT, or income tax, though businesses face a rise in National Insurance to 15% starting April 2025.
- Retail and hospitality sectors will benefit from a 40% relief on business rates, capped at £110,000, as the current 75% discount ends in April 2025.
- The minimum wage will see an adjustment, increasing to £12.21 per hour for individuals over 21 years old by next April.
- Measures to combat retail crime are emphasized, with a focus on reducing organized theft following discussions with key industry groups.
Chancellor Rachel Reeves has introduced her first Budget, marking a significant moment in UK’s economic policy. Notably, she assured there would be no rise in National Insurance, VAT, or income tax rates for individuals. However, businesses will see their National Insurance contributions rise to 15% from April 2025. Reeves openly acknowledged the challenges in making these decisions, emphasizing the necessity to bolster the financial stability of the nation.
Amid these tax changes, the retail and hospitality sectors can expect some relief. Starting next year, these businesses will benefit from a 40% relief on business rates, though capped at £110,000 per business. This policy comes as the current 75% discount is set to expire in April 2025. Small businesses will see the business rates multiplier remain steady at 49.9p, while a higher rate will be introduced for properties deemed “most valuable” in 2026-27.
Further, Reeves announced a pivotal increase in the minimum wage, where those aged over 21 will earn at least £12.21 per hour starting in April. This adjustment reflects the government’s effort to support the working population amidst economic recovery aspirations.
The Budget also addresses retail crime with a commitment to clamping down on shoplifters and organized crime gangs. Reeves highlighted this as a priority following consultations with entities such as the British Retail Consortium and Usdaw. These targeted measures are part of a broader agenda to ensure economic stability, a sentiment underscored by Reeves as she tackled the alleged £22 billion shortfall in public finances.
Additionally, capital gains tax will undergo adjustments moving forward; profits from asset sales, including property and investments, will face increased tax rates – from 10% to 18% for basic taxpayers, and from 20% to 24% for higher earners. This shift aims to address economic discrepancies and invigorate fiscal responsibility. Also noteworthy, the government plans to maintain the fuel duty freeze into 2025.
Chancellor Reeves’ Budget underscores a commitment to economic stability, with strategic adjustments in taxes and social benefits to guide the UK forward.
