Chancellor Rachel Reeves outlined her budget, with key fiscal measures impacting businesses and workers.
- No immediate hikes in National Insurance, VAT, or income tax for individuals were announced, easing public concerns.
- Businesses will face a National Insurance rate increase to 15% from April 2025, impacting financial planning.
- Retail and hospitality sectors can expect a 40% relief on business rates, capped at £110,000 per business.
- Minimum wage is set to rise in April, providing a boost to over-21 workers earning £12.21 an hour.
Chancellor Rachel Reeves presented her first budget, targeting economic stability amid financial challenges. Her statement assured citizens that there would be no rise in National Insurance, VAT, or income tax for individuals, which aims to maintain consumer confidence and spending power.
Businesses, however, are preparing for a National Insurance rise to 15% from April 2025. This change will demand strategic adjustments in budgeting and financial forecasting for enterprises across the country.
To support the retail and hospitality sectors, Reeves announced a 40% relief on business rates, though this benefit is limited to a maximum of £110,000 per business each year. This measure seeks to alleviate some of the financial pressures faced by these industries as the current 75% discount on business rates expires in April 2025.
Reeves also confirmed an increase in the minimum wage, set to take effect in April, with over-21s expected to earn £12.21 per hour. This rise aims to enhance living standards and address inflation concerns, as the Office for Budget Responsibility predicts consumer price inflation to average 2.5% this year.
In addressing the nation’s fiscal deficit, Reeves pointed to a £22 billion shortfall attributed to previous governments. She emphasised that her budget prioritises the restoration of economic balance, asserting that the government will take steps to safeguard public finances, including freezing fuel duty in 2025.
The budget also tackles capital gains tax adjustments, increasing from 10% to 18% for basic rate taxpayers, and from 20% to 24% for higher rate taxpayers. This move aligns with broader economic strategies to manage the fiscal shortfall and fund essential services.
Chancellor Reeves’ budget reflects strategic choices aimed at stabilising the economy while supporting businesses and workers amid ongoing fiscal challenges.
