The Chancellor of the Exchequer, Rachel Reeves, has announced the details of the Autumn Budget. The key provisions will be of interest to people tax planning in Oswestry, Cheshire and across the UK. They contain a number of eye-catching announcements.
Firstly, Income tax and National Insurance (NI) thresholds remain frozen for a further three years after 2028. The Office for Budget Responsibility (OBR) has calculated that by continuing this freeze in thresholds, the government will be able to raise about £42.9 billion annually by 2027-28. This policy is known as ‘fiscal drag’ and is forecast to draw more taxpayers into a higher rate band.
A new High Value council tax surcharge in England, nicknamed the ‘mansion tax’, will target high end property from 2028 onwards. Property valued at over £2 million will be liable for a £2,500 annual charge, which rises to £7,500 on properties worth over £5 million. It is estimated this tax will impact 1% of properties and raise at least £400 million by 2031.
In a move designed to boost spending in the economy, the tax-free cash ISA has been reduced by £8,000. This means the amount you are able to deposit in a tax-free cash ISA is now £12,000, compared with £20,000 previously. This change won’t take effect until April 2027 and will not impact pensioners.
There will also be a cap on pension salary sacrifice schemes, effective from 2029. As a result, contributions over £2,000 will be subject to tax similarly to other existing employee pension contributions. There will be many areas of interest here for financial planners to consider in the months ahead.
