When is the Budget and what could Rachel Reeves announce?

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Here is a summary of the key planned UK tax and pension changes reported, based on the information you’ve shared:

### Income Tax Bands (England/Wales)
– Basic rate: up to £50,270 taxed at 20%
– Higher rate: £50,271 to £125,140 taxed at 40%
– Additional rate: over £125,140 taxed at 45%
– Note: Scotland has its own bands and rates.
– Personal allowance reduces by £1 for every £2 earned between £100,000 and £125,140.

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### Pension Contributions
– Chancellor plans to raise approx. £2bn by limiting the tax break on pension contributions.
– Proposed £2,000 cap on pension contributions via “salary sacrifice” exempt from National Insurance (NI) payments.
– Contributions exceeding the cap would be subject to NI by both employers and employees.
– Full new state pension expected to increase by £550+ a year from April due to the “triple lock” (2.5%, inflation, or average earnings growth—whichever is highest).

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### Property Taxes
– New tax proposed on high-value homes in England.
– Properties worth more than £2 million (about 100,000 properties, mainly in council tax bands F, G, H) to be revalued, with an average surcharge of £4,500.
– Possible additional NI liabilities for landlords whose rental income is not their main income source.
– Proposal that all landlords pay NI at 20% basic rate plus 8% additional rate on rental income above £50,270.

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### Electric Vehicles (EV)
– Considering new tax on EVs to replace lost fuel duty revenue.
– Potential 3p per mile charge on EV drivers, which could add approx. £12 for London to Edinburgh trips.
– Budget may include £1.3bn extra funding for Electric Car Grant scheme, offering subsidies up to £3,750 on eligible EVs.

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### Cycle to Work Scheme
– Possible cap on tax break for bikes purchased through salary sacrifice scheme.
– Scheme currently offers tax savings of 42% for higher-rate taxpayers and 30% for basic rate.
– Previous £1,000 spending cap lifted in 2019 may be reinstated as a limit.

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If you want further details on any specific aspect, such as how the pension contribution cap will work, or more precise calculations on how these changes might affect individual taxpayers, just let me know!

Read the full article from The BBC here: Read More

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