Overview of UK Tax, Transport, Wages, Housing, and Economic Policies

Personal Taxes

• Income Tax Rates and National Insurance (NI): The income tax rate and National Insurance contributions paid by employees, along with the VAT rate, will remain unchanged.
• Income Tax Thresholds: Income tax band thresholds will rise with inflation after 2028, aiming to prevent more individuals from entering higher tax bands as wages increase.
• Capital Gains Tax (CGT): Basic rate capital gains tax on profits from share sales will increase from 10% to 18%, while the higher rate will rise from 20% to 24%.
• Inheritance Tax and Exemptions: The inheritance tax threshold freeze will extend until 2030, with unspent pension funds subject to inheritance tax from 2027. Exemptions for inheriting farmland will become less generous starting in 2026.

Business Taxes

• National Insurance for Businesses: From April, firms will be required to pay National Insurance on worker earnings above £5,000, down from the current £9,100 threshold, with the rate increasing from 13.8% to 15%, projected to raise an estimated £25 billion annually.
• Employment Allowance Increase: The employment allowance enabling companies to reduce NI liability will rise from £5,000 to £10,500.
• Private Equity Tax on Profits: Taxes on private equity manager profits will increase from up to 28% to up to 32% starting April.
• Corporation Tax Rate: The main corporation tax rate on profits over £250,000 will remain at 25% until the next election.

Transport Policies

• Single Bus Fare Cap: The cap on single bus fares in England will rise from £2 to £3 starting in January.
• Fuel Duty Reduction: A 5p cut to fuel duty on petrol and diesel will continue through April 2025.
• High-Speed Rail and Infrastructure Commitments: Funding is allocated for tunneling HS2 to reach Euston station, along with commitments to upgrade the trans-Pennine rail line between York and Manchester.
• Air Passenger Duty on Private Jets: Air Passenger Duty for private jet flights will increase by 50%.

Smoking and Alcohol Tax Updates

• Vaping Tax: A new tax of £2.20 per 10ml of vaping liquid will be introduced starting in October 2026.
• Tobacco and Alcohol Tax: Tobacco taxes will increase by 2% above inflation, with a 10% increase for hand-rolling tobacco. Tax on non-draught alcoholic beverages will rise with Retail Price Index (RPI) inflation, while tax on draught drinks will decrease by 1.7%.

Wages, Benefits, and Pensions

• Minimum Wage Increase: The legal minimum wage for those over 21 will rise from £11.44 to £12.21 per hour in April. Rates for ages 18-20 will increase from £8.60 to £10, moving towards a unified adult wage rate.
• Carer’s Allowance Eligibility: Eligibility for full-time carer’s allowance will expand, with the earnings threshold rising from £151 to £195 weekly.

Housing and Stamp Duty

• Affordable Homes Budget Increase: An additional £500 million will support the affordable homes budget through 2026.
• Social Housing Rent Increase: Social housing providers will have the option to raise rents above inflation under a new multi-year settlement.
• Stamp Duty on Second Homes: The stamp duty surcharge on second home purchases in England and Northern Ireland will increase from 3% to 5%.

UK Economic Growth, Debt, and Inflation

• Economic Growth Predictions: The Office for Budget Responsibility forecasts the UK economy to grow by 1.1% this year, 2% next year, and 1.8% by 2026.
• Inflation Forecast: Inflation is projected to average 2.5% this year and 2.6% next year, with a drop to 2.3% expected in 2026.
• Government Debt Definition: The official definition of UK government debt is expanded to include a broader range of assets, like future student loan repayments.

Government Spending on Public Services

• NHS Funding Increase: The NHS in England will receive an additional £22.6 billion for day-to-day operations and £3.1 billion for investment.
• Education Investment: £6.7 billion is allocated for educational investments next year, with £1.4 billion designated for rebuilding over 500 schools.

Additional Government Measures

• Compensation for Victims: The government will allocate £11.8 billion to compensate victims of the infected blood scandal, with £1.8 billion set aside for wrongfully prosecuted Post Office sub-postmasters.
• Mineworker Pension Surplus: The government will no longer receive surplus cash from the mineworker pension scheme.

(Sources: bbc.co.uk)