When is the Budget and what might be in it?

At the election, Labour promised not to increase taxes on “working people”. It said it would not raise VAT (value added tax), income tax or National Insurance (NI).

But there has been lots of speculation about what the Budget could contain:

National Insurance contributions by employers

There have been strong indications the chancellor is planning to increase NI contributions paid by employers. Reeves said Labour’s election pledge related to employee payments.

Employers currently pay NI on their workers’ earnings at a rate of 13.8%.

At the moment companies do not pay NI on pension contributions they make for staff, but reports have suggested this could change.

Businesses have argued that raising NI for employers will make it harder to hire staff and create jobs.

Income tax and NI thresholds

These are the income levels at which people start paying NI or income tax, or have to pay higher rates.

These used to rise every year in line with inflation, but were frozen by the previous Conservative government in 2022.

These were due to start rising again each year from 2028, but the chancellor is now thought to be considering extending the freeze for the remainder of the parliament.

Freezing the thresholds means that more people start paying tax and NI as their wages increase, and more people pay higher rates.

Inheritance Tax

This tax, which is currently 40%, is usually paid on the value of a deceased person’s assets above a threshold of £325,000.

It is thought changes to a number of exemptions which affect how much inheritance tax people have to pay are being considered.

Capital gains tax (CGT)

This tax is charged on the profit made from the sale of assets, external that have increased in value, such as second homes or investments.

It is paid by individuals and some business owners. For higher earners, the levy is currently 24% on gains from selling additional property, or 20% on profits from other assets like shares.

There has been speculation that these rates could be increased but the prime minister appeared to dismiss suggestions of a rise to as much as 39%.

Pension taxation

There are various ways the chancellor could raise more money by changing the way private pensions are taxed.

That could include reducing the cap on tax-free lump sums from pension pots, cutting the tax break for employers putting money into employees’ pensions, or changing the system of tax relief on pension contributions, external.

At the moment, basic rate taxpayers get tax relief at 20% and higher rate taxpayers at 40% or 45%.

The government could introduce a single flat rate of relief which would make the system less generous for higher earners, although reports have suggested this is now unlikely.

Stamp duty

Stamp Duty Land Tax, external is paid if you buy property or land over a certain price in England and Northern Ireland.

In 2022, the rate at which people start to pay was increased from £125,000 to £250,000. For first-time buyers it rose from £300,000 to £450,000.

However, the higher thresholds are only due to last until March 2025 after which they will return to the original levels. Labour has not committed to an extension.

Non-dom tax status

The term “non-dom” describes a UK resident whose permanent home – or domicile – for tax purposes is outside the UK. As a result, they do not pay UK tax on money they make elsewhere.

In the March Budget, the then-Chancellor Jeremy Hunt said non-dom tax status would be abolished, although there were some concessions.

Labour has said it wants to toughen the existing plans, although these plans might be reconsidered amid worries they could bring in less money than expected.

Fuel duty

Fuel duty has not risen in more than a decade, external. It was frozen between 2012 and 2022, and cut by 5p in March 2022 when pump prices surged following Russia’s invasion of Ukraine.

However, some motoring groups argue the cut was never passed on to motorists and the RAC says it could be reversed.

Minimum wage

Reports suggest the government will announce a bigger-than-expected increase in the National Minimum Wage and National Living Wage.

The Low Pay Commission recommended that the National Living Wage go up by 5.8% to £12.10 in April 2025, but the chancellor could announce a 6% increase.

Younger workers who receive the lower National Minimum Wage may see a larger rise as the government wants to narrow the gap between the amount they are paid and the rate for older employees.