Introduction
In an unexpected turn of events, Chancellor Rachel Reeves presented the Budget news 2024, signaling a major change in economic policy. This marks Labour’s first budget in nearly 15 years, with an aim to boost the economy through a mix of revised taxes and strategic spending.
If you’re earning a low wage, you can expect your pay to go up soon.
Starting in April, employers across the UK are required to increase the minimum wages. Here’s what you need to know:
- The National Wage for employees who are 21 and older will increase from £11.44 per hour to £12.21.
- If you are between 18 and 20 years old, the National Wage will move up from8.60 per hour to £10.
- For those who are 16 or , the minimum wage will rise from £6.40 per hour to £7.55.
- The apprentice rate, which applies to eligible people under 19 or those over 19 in their first year of apprenticeship, will also jump from £6.40 per hour to £7.55.
While these percentage increases are smaller compared to the last couple of years, it’s because the cost of living isn’t climbing as quickly anymore.
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The cost of vaping and smoking is set to increase due to tax hikes revealed in Chancellor Rachel Reeves’ Budget. Beginning in October 2026, a new tax of £2.20 will be applied per 10ml of e-cigarette liquid. This will be accompanied by a similar £2.20 increase per 100 cigarettes in tobacco duty to “maintain the financial incentive to switch from tobacco to vaping.”
Reeves also announced immediate above-inflation hikes: a 2% rise for tobacco and a 10% increase for hand-rolled tobacco. Regarding alcohol duties, starting February 2025, there will be a 1.7% reduction in draught beer duty, effectively “reducing the cost of a pint by a penny in the pub.”
Conversely, rates on non-draught products like wine and spirits will climb in line with the higher RPI measure of inflation. Addressing the rise, the chancellor explained that “two-thirds of alcoholic drinks sold in pubs are served on draught.”
The UK Spirits Alliance (UKSA) criticized the increase as a “kick in the teeth,” stating: “Today’s decision won’t prevent thousands more pubs and distillers from shutting down.”
Taxation Changes: The Core of the
The 2024 Budget news outlines groundbreaking changes in taxation, including an increase in the overall tax load to help tackle fiscal deficits and support public services. Key changes announced by the Chancellor include:
- Income Tax Adjustments: Although the main rates stay the same, the plan involves modifying thresholds to potentially bring in more revenue by moving more earners into higher tax brackets.
- Capital Gains Tax (CGT): There are plans to align CGT more closely with income tax levels, which could influence investments. The introduction of inflation indexation may help lessen some negative impacts.
- Inheritance Tax (IHT): Reeves intends to reform IHT by capping exemptions on specific assets, which could notably boost tax revenues from high-value estates. This change is likely to have a significant effect, especially in London and the Southeast where property values are particularly high.
Spending Priorities: Education and Health
A major focus of the budget news is the reallocation of funds to vital public domains like education and healthcare:
- Education: Imposing VAT on private school fees is expected to generate £1.6 billion, dedicated to recruiting new teachers nationwide and strengthening the state education system.
- Healthcare: While the budget does not directly increase healthcare funding, it remains a debated topic, particularly concerning the efficiency and financing of the NHS under these new economic conditions.
Economic and Social Outcomes
The budget’s daring approach has sparked lively discussions among the public and politicians alike. Through prioritized tax revisions and planned spending, the government aims to achieve steady growth in the UK’s economy while cutting down on national debt. Still, these strategies could provoke disapproval from numerous groups affected by the new taxation policies and budget reductions.
Looking Ahead
As the UK moves forward with these changes, the success of the 2024 Budget news will significantly influence the economic and social landscape of the nation. The results of these strategies may set the course for the Labour government’s political and economic direction in the coming years.
This budget news goes beyond mere financial figures; it is also a major political statement, outlining how the UK plans to manage economic recovery and progress amidst worldwide challenges.
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