UK Budget 2024: Chancellor Rachel Reeves announces tax rises and spending boosts

Chancellor Rachel Reeves has revealed several tax increases and spending plans to boost economic resilience while funding key public services

The UK Budget, which looks to raise taxes by £40 billion, will see an increase in National Insurance contributions for employers starting in April 2024. Reeves, who made history as the UK’s first female chancellor, emphasised that these measures are designed to fund essential programs without prolonging the burden on working families.

UK Budget 2024: Key points to take away

Among the main measures, Reeves said that the existing freeze on income tax and National Insurance thresholds will remain in place but will not extend beyond 2028.

This shift is intended to ease long-term pressures on household incomes, with the chancellor emphasising her commitment to minimising direct impacts on “working people.”

Further changes to taxation include an increase in Capital Gains Tax, which will affect asset sales and investments. To support environmentally conscious policies, Reeves opted for a freeze on fuel duty, maintaining the current rates on petrol and diesel for the next financial year.

Since January, private school fees have been subject to VAT, a decision likely to generate additional revenue for public services while aligning education costs more closely with the state education sector.

Continuing with her commitment to supporting wage growth, Reeves reiterated plans to raise the minimum wage starting in April.

In a more lighthearted announcement, she promised a reduction in the duty on draught alcohol, effectively making pints at the pub slightly cheaper, hoping to support local businesses and social venues that have faced challenges in recent years.

Where will spending go? Housing, health, and infrastructure

In terms of spending, Reeves announced substantial investments in health, housing, and infrastructure. The NHS will see a significant uplift, with £22.6 billion directed towards day-to-day health services, aimed at addressing ongoing issues such as waiting lists and staffing shortages.

Matthew Hodgson, Co-Founder & CEO at Element, UK-based end-to-end encrypted messaging platform, said, “It’s been confirmed that we can expect to see an extra £1.57bn of this year’s autumn budget allocated to the NHS for new surgical hubs, scanners, and radiotherapy machines. 

“Although we can expect an extra 40,000 appointments each week, if we don’t have the plans in place to appropriately manage the associated rise in data – then we could risk violating data privacy regulations.”

A £5 billion investment is allocated for house building, part of a wider plan to tackle the UK’s housing shortage and affordability crisis.

Reeves also confirmed funding for the completion of the HS2 rail link, extending the project to London Euston station. This high-speed connection hopes to improve transportation infrastructure and regional connectivity, although the project has faced ongoing debates over costs and environmental impact.