Can businesses survive the NI hike, hard to see how this is going to kickstart the economy…
National Insurance: Employers’ National Insurance contributions will rise from 13.8% to 15%, and the threshold at which they must pay it will drop from £9,100 to £5,000. But there’s some relief for employers in that employment allowance – which allows companies to reduce their NI liability – will increase from £5,000 to £10,500.
Income tax: Despite predictions that Reeves might continue the freeze in income tax thresholds beyond 2028-29, she said that after that they would go up in line with inflation.
Capital Gains Tax: For higher rate taxpayers, on assets such as shares this will go up from 20% to 24%, for lower rate taxpayers, it will rise from 10% to 18%. On residential property, the rates will remain at 24% and 18%.
Alcohol duty: Tax on draught drinks will be cut by 1.7%, while non-draught drinks will see a rise in line with Retail Price Index (RPI) – the higher measure of inflation
Fuel duty: The 5p cut to fuel duty on petrol and diesel, due to end in April 2025, will be kept for another year
Stamp duty: From tomorrow, the stamp duty land surcharge for second homes raises by 2% to 5%
The Industrial Strategy has identified eight high-growth sectors that will help drive the green economy and the supply chains that are powering them, and to this end the Chancellor commented: “Today’s budget marks an end to short-termism. For the first time, the Office for Budget Responsibility (OBR) has published not only five-year growth forecasts, but a detailed assessment of the growth impacts of our policies over the next decade.
“This includes nearly £1bn towards the aerospace sector, inviting research and development and building on our industry in the East Midlands, the South West and in Scotland; over £2bn pounds for the automotive sector, our electric vehicle industry and to develop our manufacturing base, building on our strengths in the North East and the West Midlands; and up to £520m for a new life sciences and innovative manufacturing.
“And to bring new jobs to Britain and to drive growth across our country, we are delivering our plan to make Britain a clean energy superpower. Earlier this month, we announced a significant multi-year investment between government and business into carbon capture and storage, creating 4,000 jobs across Merseyside and Teeside. Today, I am also providing funding for 11 new green hydrogen projects across England, Scotland and Northern Ireland.”
The stock market didn’t seem particularly concerned with any of Reeve’s budget, in fact Bank stocks were buoyed by the lack of any increase to the ‘windfall’ tax.
Time will tell if her plan will work or not, but are we any the wiser what a working person is?
