好色先生TV

The chancellor has announced 拢40bn in tax rises in a Budget that aimed to 鈥渞estore stability鈥� to public finances.

Rachel Reeves announced that capital gains tax (CGT), employer contributions to national insurance and stamp duty would all rise, but included a few measures to soften the impact on housing and small-to-medium-sized enterprises.

Alluding once again to a 鈥渂lack hole in public finances鈥�, Reeves said that she would publish a 鈥渓ine by line breakdown鈥� of the 拢22bn shortfall she claims was inherited from the Conservative government.

鈥淭he party opposite hid the reality of their spending plans,鈥� she said. 

鈥淭hey had no plan to improve our public services and they had no plan to put our public finances on a stable footing鈥�.

By contrast, Reeves said Labour was 鈥渞estoring stability to our public finances and rebuilding our public services鈥� and that, in order to do so, it needed to take 鈥渄ifficult decisions on tax鈥�.

鈥淲orking people will not see higher taxes in their payslips as a result of the choices that I am making today,鈥� she said, instead putting the burden on businesses.

鈥淲e are asking businesses to contribute more,鈥� she said. 鈥淏ut in the circumstances that I have inherited it is the right choice to make. 

鈥淪uccessful businesses depend on successful schools, healthy businesses depend on a healthy NHS and a strong economy depends on strong public finances鈥�

Employers鈥� national insurance contributions will rise by 1.2 percentage points to 15% from April 2025, while the secondary threshold will be reduced from 拢9,100 a year to 拢5,000. 

This, Reeves claimed, will raise 拢25bn a year by the end of the forecast period.

The chancellor, who is the first woman ever to deliver a Budget speech, said it was 鈥減articularly important to protect our smallest companies鈥�, announcing that the employment allowance would be increased from 拢5,000 to 拢10,500.

She said this would allow a small business to employ the equivalent of four full-time workers on the national living wage without paying any national insurance on their wages.

The National Living Wage itself is to be raised by 6.7% to 拢12.21 an hour, and the government will phase in a single rate for all adults, with the existing lower rate for younger people gradually increased. 

Meanwhile, the government will reduce the lifetime limit for business asset disposal relief to  拢1m to encourage entrepreneurs to invest in their businesses.

The lower rate of CGT will increase from 10% to 18% and the higher rate from 20% to 24%. However the rate of CGT applied to residential property will be maintained at 18% and 24% too.

These measures will raise 拢2.5bn by the end of the forecast, Reeves said.

The stamp-duty land tax surcharge for second-homes will be raised by 2 percentage points, to 5%. Reeves says this will support over 130,000 additional transactions from people buying their first home, or moving home over the next five years.

Other revenue raising measures include the abolition of non-dom tax status, VAT for private schools, structure rules on inheritance and new duties on vaping and a rise in tobacco duty.

Corporation tax will be capped at 25% for the duration of the parliament and the government will maintain measures including full expensing, the 拢1m annual investment allowance and current rates of R&D relief.

Eddie Tuttle, director of policy, research and public affairs at CIOB, said higher taxes were 鈥渓ikely to increase financial strains on the SMEs that are so vital to the industry and its supply chain鈥�. 

鈥淣early a fifth of UK SMEs operate in construction and the cyclical, boom-bust nature of the sector, as well as recent economic hardships, have created a difficult environment for these businesses,鈥� he said.

鈥淪o far in 2024, they have accounted for 20% of business insolvencies and alarmingly, around 11,000 firms have collapsed since 2022.  

鈥淲hile we understand the need to build up public finances and reorder the fiscal rules to channel greater investment, the impact of increased costs on construction SMEs could be devastating. SMEs play a vital role in the delivery of new homes and infrastructure as well as the repair and maintenance of existing buildings. 

鈥淚ncreased tax rises without consistent monitoring of the impact they have on the health of crucial sectors, such as construction, run the risk of damaging the pivotal role SMEs play. We urge ongoing government consultation with bodies like CIOB to monitor these impacts on the sector.鈥�