What does the Autumn Budget mean for you?

For the first time since 2010, Labour has delivered its budget. Chancellor Rachel Reeves stood outside Downing Street with that famous red box earlier today, as she announced tax rises with about £40 billion.

However, she insisted that “working people” would not be out of pocket via an increase in income tax, national insurance nor VAT, and that the increases were necessary to rebuild public services and stabilise the public finances.

Commenting on the budget, Steve Darling, MP for Torbay said: “There's good news like the NHS funding boost & minimum wage increase, but concerns remain. The bus fare cap hike and NI rise will hit hard-working people and small businesses.  The Lib Dems will keep fighting for a fairer deal!”

Here’s a summary of the key points: 

Personal Tax Updates

• Income tax rates, National Insurance contributions for employees, and VAT levels are expected to stay the same.
• Thresholds for income tax bands will be adjusted with inflation starting after 2028, potentially helping to keep more people from moving into higher tax brackets as salaries increase.
• The capital gains tax on share sale profits will see changes, with the base rate going up from 10% to 18%, while the higher rate is set to move from 20% to 24%.
• Tax rates for profits from selling additional properties remain as they are.
• The inheritance tax threshold freeze will extend another two years to 2030, and unused pension funds may be included in the tax scope from 2027.
• Certain exemptions for inherited farmland will be reduced in generosity beginning in 2026.

Economic Measures

• The Office for Budget Responsibility forecasts UK economic growth of 1.1% this year, 2% next year, and 1.8% in 2026.
• Inflation is expected to average 2.5% this year, 2.6% next year, and decline to 2.3% by 2026.
• The official definition of government debt has been broadened to include a wider range of financial assets, like future student loan repayments

Transport Updates

• 5p cut in fuel duty on petrol and diesel extended to April 2026
• Single bus fare cap in England to rise from £2 to £3 in January
• Funding confirmed for HS2 tunnel extension to Euston station in London
• Trans-Pennine rail upgrade between York and Manchester to proceed
• Air Passenger Duty on private jets to increase by 50%
• Extra £500m allocated for pothole repairs in England next year
• First-year Vehicle Excise Duty on most new petrol cars to double, promoting electric vehicle uptake

Business Tax Adjustments

• Starting in April, companies will see National Insurance contributions set at 15% for salaries exceeding £5,000, an increase from the current 13.8% applied to salaries over £9,100. This change is expected to bring in an extra £25 billion annually.
• The employment allowance, which helps smaller businesses offset their National Insurance liabilities, will increase from £5,000 to £10,500.
• The tax rate on profit shares earned by private equity managers in successful deals will rise from a maximum of 28% to up to 32% as of April.
• The main corporation tax rate, applicable to business profits above £250,000, will remain at 25% at least until the next election.

Drinking and Smoking Updates

• New £2.20 tax per 10ml on vaping liquid starting October 2026
• Tobacco tax to rise by 2% above inflation, and by 10% above inflation for hand-rolling tobacco
• Tax on non-draught alcoholic drinks to rise with RPI inflation; draught drinks tax to decrease by 1.7%
• Government reviewing sugar tax thresholds on soft drinks, with potential extension to "milk-based" beverages

Wages, Benefits, and Pensions

• Minimum wage for over-21s to increase from £11.44 to £12.21 per hour in April
• Wage for 18 to 20-year-olds to rise from £8.60 to £10, aiming for a unified "single adult rate"
• Basic and new state pension payments to grow by 4.1% under the "triple lock," exceeding increases for working-age benefits
• Carer’s allowance eligibility expanded, with earnings threshold raised from £151 to £195 per week

Government Spending and Public Services

• Additional £22.6bn for NHS day-to-day spending in England, plus £3.1bn for investment
• £6.7bn set aside for education, with £1.4bn allocated for rebuilding over 500 schools
• Defence budget to increase by £2.9bn next year

Housing Updates

• Social housing providers permitted to raise rents above inflation under a multi-year settlement
• Stamp duty surcharge on second homes in England and Northern Ireland to increase from 3% to 5%
• Affordable homes budget, active until 2026, receives an additional £500m boost