The UK's Chancellor, Rachel Reeves, has unveiled her budget with several key announcements aimed at curbing inequality and boosting revenue.
Reeves has scrapped the two-child benefit cap, a move designed to target higher-income families who are disproportionately benefiting from tax credits. The abolition of this cap is part of a broader effort to address poverty and reduce the wealth gap between different segments of society.
In addition to the scrapped benefit cap, Reeves has introduced a new "mansion tax" on properties valued above £1 million. This measure is intended to target high-net-worth individuals who own multi-million-pound homes, with revenues generated from this tax earmarked for education and social services.
The Chancellor has also raised income tax rates on savings, dividends, and property income, in a bid to reduce inequality and generate additional revenue for public spending. Notably, basic rates of income tax, VAT, and national insurance will remain unchanged, marking a departure from previous budgets where such increases were implemented.
However, income tax thresholds have been frozen until the 2030-31 tax year, a promise made by Labour during their election campaign to not raise taxes on working people. This stance is likely to be welcomed by low- and middle-income earners who could see an increase in their disposable income as a result.
Individuals looking for more detailed guidance on the budget's impact on their financial situation are advised to consult with experts, such as our economics editor Heather Stewart or money and consumer editor Hilary Osborne. Please note that these publications cannot provide personalized financial advice.
Reeves has scrapped the two-child benefit cap, a move designed to target higher-income families who are disproportionately benefiting from tax credits. The abolition of this cap is part of a broader effort to address poverty and reduce the wealth gap between different segments of society.
In addition to the scrapped benefit cap, Reeves has introduced a new "mansion tax" on properties valued above £1 million. This measure is intended to target high-net-worth individuals who own multi-million-pound homes, with revenues generated from this tax earmarked for education and social services.
The Chancellor has also raised income tax rates on savings, dividends, and property income, in a bid to reduce inequality and generate additional revenue for public spending. Notably, basic rates of income tax, VAT, and national insurance will remain unchanged, marking a departure from previous budgets where such increases were implemented.
However, income tax thresholds have been frozen until the 2030-31 tax year, a promise made by Labour during their election campaign to not raise taxes on working people. This stance is likely to be welcomed by low- and middle-income earners who could see an increase in their disposable income as a result.
Individuals looking for more detailed guidance on the budget's impact on their financial situation are advised to consult with experts, such as our economics editor Heather Stewart or money and consumer editor Hilary Osborne. Please note that these publications cannot provide personalized financial advice.
and what about all the people who own multi-million-pound homes but aren't that rich? like, my aunt owns a pretty big house but she's not making bank off of it. does that mean her tax bill just went up for nothing? 
anyway, i'm kinda down with the two-child benefit cap being scrapped - it's not like it was a huge issue for most people and now those higher income families might actually have to pay more towards the system. but at the same time, its not like this is gonna magically solve all our problems or anything...still got my eye on how they're handling income tax rates and savings tho 
i mean tax credits for high-income families got to go its about time they try to spread the love a bit more 
now we gotta keep our fingers crossed they actually make it work without screwing over low-income fams like last time 
on the bright side a mansion tax is not a bad idea 
lets see how this all plays out 
That's like a major win for low-income families! I was worried they'd make things even harder for them. And introducing a mansion tax on properties over £1 million? Genius move! 
Like, who doesn't want to reduce wealth inequality and boost revenue for education and social services? 
I love that basic rates of income tax, VAT, and national insurance are staying the same tho - gotta respect low- and middle-income earners not getting hit with more taxes. 
! Reeves makes some moves to level the playing field 
. But then, she slaps on a mansion tax 
, targeting high-net-worth individuals with multi-million-pound homes 
. It's like, if you're making that kind of dough 
The income tax rates are gonna rise, but don't worry, basic rates stay the same 
. And hey, at least the education and social services get some love 
.
. Until then, I'll be over here, watching my budget like a hawk 
!
. I'm not buying it, Rachel Reeves 
still, i appreciate rachel reeves trying to address income inequality... it's a start 
. btw, why didn't she increase basic rates of income tax/vat/national insurance instead of introducing new taxes on savings/dividends/property income? seems like it would've generated more revenue 
The mansion tax is a pretty interesting move by Chancellor Reeves. It seems like she's trying to create a more level playing field for the super-rich who own massive homes, while also generating revenue for public services. Interesting how the income tax thresholds have been frozen until 2030-31, though - maybe that'll be a game-changer for low- and middle-income earners? 
. Not to mention, raising income tax rates on savings, dividends, and property income will definitely help reduce inequality. Let's hope Labour sticks to their promise not to raise taxes on working people 