Budget 2024 summary: Key points from Rachel Reevess speech

Chancellor Rachel Reeves has delivered Labour’s first Budget since 2010, after the party’s return to power in July’s general election.

She announced tax rises worth £40bn to fund the NHS and other public services.

Here is a summary of the main measures.

• Rates of income tax and National Insurance (NI) paid by employees, and of VAT, to remain unchanged
• Income tax band thresholds to rise in line with inflation after 2028, preventing more people being dragged into higher bands as wages rise
• Basic rate capital gains tax on profits from selling shares to increase from from 10% to 18%, with the higher rate rising from 20% to 24%
• Rates on profits from selling additional property unchanged
• Inheritance tax threshold freeze extended by further two years to 2030, with unspent pension pots also subject to the tax from 2027
• Exemptions when inheriting farmland to be made less generous from 2026

• Companies to pay NI at 15% on salaries above £5,000 from April, up from 13.8% on salaries above £9,100, raising an additional £25bn a year
• Employment allowance – which allows smaller companies to reduce their NI liability – to increase from £5,000 to £10,500
• Tax paid by private equity managers on share of profits from successful deals to rise from up to 28% to up to 32% from April
• Main rate of corporation tax, paid by businesses on taxable profits over £250,000, to stay at 25% until next election

• Legal minimum wage for over-21s to rise from £11.44 to £12.21 per hour from April
• Rate for 18 to 20-year-olds to go up from £8.60 to £10, as part of a long-term plan to move towards a “single adult rate”
• Basic and new state pension payments to go up by 4.1% next year due to the “triple lock”, more than working age benefits
• Eligibility widened for the allowance paid to full-time carers, by increasing the maximum earnings threshold from £151 to £195 a week

• 5p cut in fuel duty on petrol and diesel brought in by the Conservatives, due to end in April 2025, kept for another year
• £2 cap on single bus fares in England to rise to £3 from January, outside London and Greater Manchester
• Commitment to fund tunnelling work to take HS2 high-speed rail line to Euston station in central London
• Government says it will “secure the delivery” of Transpennine rail upgrade between York and Manchester, after reports ministers were looking to cut costs
• Air Passenger Duty to go up in 2026, by £2 for short-haul economy flights and £12 for long-haul ones, with rates for private jets to go up by 50%
• Extra £500m next year to repair potholes in England
• Vehicle Excise Duty paid by owners of all but the most efficient new petrol cars to double in their first year, to encourage shift to electric vehicles

• New flat-rate tax of £2.20 per 10ml of vaping liquid introduced from October 2026, as ministers shelve Tory plans to link the levy to nicotine content
• Tax on tobacco to increase by 2% above inflation, and 10% above inflation for hand-rolling tobacco
• Tax on non-draught alcoholic drinks to increase by the higher RPI measure of inflation, but tax on draught drinks cut by 1.7%
• Government to review thresholds for sugar tax on soft drinks, and consider extending it to “milk-based” beverages

• Day-to-day spending on NHS and education in England to rise by 4.7% in real terms this year, before smaller rises next year
• Defence spending to rise by £2.9bn next year
• Home Office budget to shrink by 3.1% this year and 3.3% next year in real terms, due to assumed savings from asylum system
• £1.3bn extra funding next year for local councils, which will also keep all cash from Right to Buy sales from next month

• Social housing providers to be allowed to increase rents above inflation under multi-year settlement
• Discounts for social housing tenants buying their property under the Right to Buy scheme to be reduced
• Stamp duty surcharge, paid on second home purchases in England and Northern Ireland, to go up from 3% to 5%
• Point at which house buyers start paying stamp duty on a main home to drop from £250,000 to £125,000 in April, reversing a previous tax cut
• Threshold at which first-time buyers pay the tax will also drop back, from £425,000 to £300,000
• Current affordable homes budget, which runs until 2026, boosted by £500m

• Office for Budget Responsibility (OBR) predicts the UK economy will grow by 1.1% this year, 2% next year, and 1.8% in 2026
• Inflation predicted to average 2.5% this year, 2.6% next year, before falling to 2.3% in 2026
• Official definition of UK government debt loosened by including a wider range of financial assets, such as future student loan repayments
• Budget policies will increase UK borrowing by £19.6bn this year and by an average of £32.3bn over the next five years, according to the OBR