Investing tax-free allowances were slashed by former Chancellor Jeremy Hunt

There is an annual capital gains tax-free allowance of £3,000 and the tax is charged on profits above this. Losses on the sale of investments can be deducted from gains on others.

The new CGT rates took effect from yesterday in order to prevent the mass selling of assets to avoid the new rates.

Sarah Coles, head of personal finance at Hargreaves Lansdown said: ‘Talking about things like capital gains tax as ‘wealth taxes’ obscures the fact that many people on average incomes, who’ve invested carefully throughout their lives, can face a tax bill when they rebalance their portfolio or sell up to cover their costs later in life.

‘The annual allowance of £3,000 doesn’t stretch particularly far when you’re selling an investment you’ve held for 30 years or more, so investors should consider how to protect themselves.’

If you’re a non-dom, the Budget may have been worse than you expected

Ms Reeves confirmed the Government will abolish the non-dom tax regime from April 2025.

While this had long been expected, leading tax adviser David Lesperance said the details of the announcement were in some ways worse than expected – and could prompt and exodus of wealth creators from the UK.

‘There will be a mad rush to the exits before April Fools Day as high net worth UK taxpayers flee The Nightmare from Number 11 Downing Street,’ he told MailOnline.

‘Those UK taxpayers with significant capital gains dodged a bullet as no Exit Tax was announced. However, they are still within the target of the Chancellor in future budgets.

‘This Damocles Sword combined with a significant increase in capital gains tax rates as of April 2025 will predictably result in an exodus as taxpayers look to avoid not only higher rates, but any capital gains hit.

‘Carried interest tax rates are also increasing. This combined with the ability of those with carried interest to make and maintain their wealth outside of the UK, means that Golden Geese from the City will fly to more tax-friendly locations.’

Bank of England statistics showing the tax burden all the way back to 1700

HOMEOWNERS, LANDLORDS AND RENTERS

Are you a homeowner? Forecasters fear your mortgage rates could rise

Fears are growing that mortgage rates could once again creep up if the economy deteriorates.

With the tax squeeze on Middle England and fears that inflation could go up as the Government goes on a public sector spending spree, markets were initially reacting badly to the cash grab on your finances.

The Bank of England base rate – to which mortgage rates are linked – currently stands at 5 pc. But this rate could start to rise if a deterioration in the economy leads to a rise in inflation and the base rate is hiked to keep a lid on this.

The latest measure of inflation – the Consumer Price Index (CPI), which was published earlier this month, was 1.7 pc in September. The rate peaked in October 2022 at 11.1 pc.

The Office for Budget Responsibility (OBR) predicts mortgage rates could rise by almost a percentage point to 4.5 pc over the next three years.

In its Economic and Fiscal Outlook report, released alongside the Autumn Budget, the OBR said: ‘Average interest rates on the stock of mortgages are expected to rise from around 3.7 pc in 2024 to a peak of 4.5 pc in 2027, then remain around that level until the end of the forecast [which is 2030].’

Jamie Lennox, director of broker Dimora Mortgages in Norfolk, says: ‘Do not assume mortgage rates are going to continue to go down just because they have recently – because the Office for Budget Responsibility has a real understanding of the situation.

Stamp duty rise could cost thousands if you’re a landlord… but if you rent you could be hit too

If you are a landlord or own a second home, it will come as no surprise that you were one of the main losers from the Budget.

Buy-to-let investors and second home owners already faced a 3 per cent stamp duty surcharge above and beyond what those purchasing a property to live in pay, but today this went up to 5 per cent.

This move could lead to fewer landlords buying new investments, as it adds thousands of pounds to the cost of buy-to-let purchases.

Under current rules, a £300,000 property with the surcharge included would cost £11,500 in tax. That will now rise to £17,500 with the surcharge rising to 5 per cent.

On the same property, a person buying the home to live in would pay just £2,500 – and if they were a first-time buyer, nothing at all. A second home purchase costing £500,000 previously cost £27,500. From tomorrow it will set someone back £37,500.

The changes will impact current property transactions. However, those who have already exchanged contacts will reportedly not be impacted by the hike – even if they are yet to complete.

Peter Stimson, of MPowered Mortgages, said while landlords may be put off buying, renters may be the worst hit from these changes with rents potentially now rising further and faster.

If you’re a low-income households or renting, you may be able to get up to £30,000 for home improvements

Low-income households and renters will be able to get up to £30,000 each for home improvements from next year with a £3.4billion cash pot earmarked in the Budget.

The money will go towards the Warm Homes Plan, a Government manifesto initiative to improve the properties of low-income homeowners and private tenants in homes with EPC ratings of D to G to at least C.

Ms Reeves said the £3.4billion would be spent from 2025 until 2028. The Warm Homes Plan aims to upgrade 5million houses.

Each eligible home can access £15,000 for energy performance improvements and an additional £15,000 to install low-carbon heating, such as heat pumps.

Homeowners and tenants will not have to pay any of their own cash to upgrade their homes in this way.

However, landlords will get one home’s upgrades paid for under the scheme, then contribute to paying 50 per cent of the cost of improving each extra home.

Rachel Reeves with her red box outside Number 11 Downing Street yesterday

The OBR’s estimates are that real earnings will fall in 2026 as a direct result of the Budget

 Disposable incomes are also being reduced by the changes made by Ms Reeves

PENSION HOLDERS

You could face an inheritance tax raid

Pensions will be included in the assets that count towards 40 per cent inheritance tax from April 2027, which could have a significant impact on your legacy plans.

Adding unspent pension pots into inheritance tax calculations means thresholds will be breached by many more estates in future.

The move is part of a £2billion raid on inheritance tax, which includes freezing the current main tax-free thresholds until 2030 and reforms to agricultural and business property reliefs.

Wealthier families breathed a sigh of relief as the main inheritance tax nil rate band will remain at £325,000, while the residence allowance of £175,000 for homes passed on to direct descendants will also be kept. This means married couples can still pass on up to £1million inheritance tax-free.

But the Chancellor revealed she would stage an inheritance tax raid on unused pension pots.

Adding pension pots to inheritance tax calculations could also mean more are pulled into losing some of their residence nil rate band, which is gradually removed on estates worth more than £2million.

… but you can still withdraw 25 per cent of your pension tax free

Withdrawing a tax-free lump sum of up to 25 per cent from your pension is a popular perk at retirement.

And people have raced to pull cash from their funds in the run-up to the Budget to protect it from a cap they worried was about to be imposed.

Savers typically use their lump sums to clear mortgages and other debts, and splash out on home renovations, new cars and holidays at retirement.

‘Those who’ve built up substantial pension pots will be relieved that the Chancellor didn’t introduce new limits on tax-free lump sums,’ says Steven Cameron, pensions director at Aegon.

‘Currently, individuals can typically take 25 per cent of their pension pot at retirement as a tax-free lump sum, subject to a recently introduced maximum of £268,275.

‘There was speculation that the Budget could include new limits, such as capping the tax-free lump sum at a much lower level, perhaps £100,000.’

If you receive the state pension, this will rise by £9.10 a week as expected

Ms Reeves reiterated the Government’s commitment to the pension triple lock, telling the Commons the basic and new state pension will rise by 4.1 per cent in 2025-26.

The increase will see the weekly benefit rise to £230.30 for the full new flat-rate state pension. However, with income thresholds set to remain frozen, an individual receiving just the state pension will be taxed on their income from 2027.

The Chancellor told the Commons: ‘The pension credit standard minimum guarantee will also rise by 4.1 per cent, from around £11,400 per year to around £11,850 for a single pensioner.’

Benefits including Universal Credit, Personal Independence Payment (PIP), and Pension Credit will rise in line with the Consumer Price Index (CPI) for September – meaning an increase of 1.7 per cent.

BOSSES AND WORKERS

Own a business? You could see a big costs hike

With Ms Reeves aiming to boost productivity and growth, she focused her attention on investment in the economy.

But that cash has to come from somewhere and if you’re a business owner it’s likely you’ll be picking up a substantial part of the bill.

The biggest tax increase came from employer National Insurance contributions (NICs), which will rise from 13.8 per cent to 15 per cent next April, while the threshold at which is paid has also been slashed from £9,100 a year to £5,000 from next year.

There will also be a 6.7 per cent increase in the minimum wage, which could add to the pain for businesses still struggling to recover from the pandemic, particularly in hospitality.

Becky Lumsden, 49, owns 23 beauty spas across the country, told MailOnline that she will incur extra costs of £300,000 following the increase in employers’ National Insurance contributions and the minimum wage.

Meanwhile, Simon Delaney, owner of The Firbank Pub and Kitchen in Manchester, said his montly costs would rise by £2,000.

Becky Lumsden, 49, owns 23 beauty spas across the country, told MailOnline that she will incur extra costs of £300,000 following the increase in employers’ National Insurance contributions and the minimum wage

There was some good news for small firms buried in the Budget, as business rates relief was extended, albeit at a lower level.

Ms Reeves announced an extension of business rates for 2025/26 and pledged to permanently lower business rates multipliers for retail, hospitality and leisure properties from 2026/27.

If you’re on low pay, you could see a £1,400 pay rise

The 6.7 per cent increase in the minimum wage is likely to significantly boost your income if you are among the lowest paid.

The Treasury said this rise would be worth £1,400 a year for an eligible full-time worker and will directly benefit more than three million workers.

Meanwhile, the National Minimum Wage – for 18 to 20-year-olds – will rise from £8.60 to £10 an hour from April in a 16.3 per cent increase.

This will be the largest increase on record, with the £1.40 hike meaning full-time younger workers will have their pay boosted by £2,500 next year.

The minimum wage changes in April follows Labour’s instruction to the Low Pay Commission, which recommends minimum wage rates, to include the cost of living in its calculations.

Trade union leaders welcomed the rise in minimum wage rates and said firms were ‘wrong’ to warn it could drive up unemployment.

… but it could become harder to get a job or earn a pay rise down the line

The Chancellor delivered her largest Budget tax rise in the form of an increase in employers’ national insurance contributions.

The widely-expected Autumn Budget increase will see businesses pay more towards their employees’ pensions, increasing from 13.8 per cent to 15 per cent, raising £25billion a year.

The threshold at which employer national insurance is charged has also been slashed from £9,100 to £5,000 a year. The changes come into play in April 2025.

Labour repeatedly said it would not raise taxes on working people, but businesses have warned that the move could have detrimental effects on jobs and pay.

The Office of Budget Responsibility expects 76 per cent of the hike to be passed on in lower wage rises – meaning you could be affected by the hike even if you do not own a business.

Today, Ms Reeves also conceded that pay will end up lower in the coming years as a result of her Budget measures – while insisting she had to rise taxes to fund public services.

You may pay more income tax (but the Chancellor is hoping you won’t notice…)

The freeze on income tax thresholds will last until 2029 – meaning you could be dragged into paying higher tax without realising it.

The frozen thresholds have resulted in a colossal stealth tax raid in recent years.

While neither Labour or the previous Conservative government have raised headline income tax rates, people will pay more in the coming years as thresholds fall behind inflation and wage rises.

Stealth tax grab: Higher rates  of income tax applied to 3.2million people in 2010 – they now hit 7.4million and the figure is set to continue to rise, says the IFS

The freeze was begun by Rishi Sunak in 2022 and although Ms Reeves was expected to extend it, she announced in the Autumn Budget that it would stop after the 2028 to 2029 tax year.

This is good news but by then ‘fiscal drag’ will have affected workers for seven consecutive tax years.

Income tax is charged on earnings from employment and self-employment, but also on pension income, rental income and savings interest.

TRAVELLERS

You could pay up to £1 more for a bus journey (and £1.38 more for train tickets currently costing £30)

Buses are a popular low-cost travel option, but they could soon get more expensive after Labour hiked the bus fares cap in England from £2 to £3 by the end of 2025.

Critics have branded Labour’s decision to increase the cap – first announced by the Prime Minister on Monday – as a ‘bus tax’ and said it would impact on ‘working people’ across the country.

Regulated train fares in England will increase by up to 4.6 per cent next year and the price of most railcards will rise by £5

The increase in fares is one percentage point above July’s Retail Prices Index (RPI) measure of inflation, which until 2023 was used by Westminster governments to set the cap on annual rises in regulated fares.

A Budget document published by the Treasury stated that the 4.6 per cent rise will be ‘the lowest absolute increase in three years’. Changes to fares will come into force on March 2, 2025.

About 45 per cent of fares on Britain’s railways are regulated by the Westminster, Scottish and Welsh Governments.

The Budget document also stated that the Government will ‘agree’ to a £5 increase in the price of most railcards ‘subject to an industry proposal’. The railcard for disabled passengers will be unchanged.

You could pay £2 more for an economy plane ticket – and look away if you use private jets!

Air passenger duty has been increased in the Budget, meaning you could soon find yourself shelling out more in order to travel by air.

In her statement, Ms Reeves announced a hike on charges on passenger air travel, increasing the duty by £2 a trip for short haul economy flights.

Under Labour’s new rules, passengers on these flights will pay £17 in tax for short-haul flights abroad from 2026, increasing by £4 in total including increases inherited from the Conservatives.

Currently, those in economy pay £13 for flights to Europe and North Africa or £7 for domestic flights.

The increase will not come into effect until the 2026/2027 tax year.

Under previous Tory plans, the duty was set to rise by £2 in April next year, with premium passengers paying as much as £224 for long-haul flights.

The Government said the increase was to ensure that revenues from the duty ‘remain sustainable’.

… but if you drive, you could save £48 a year thanks to a continued freeze on fuel duty

In welcome news for drivers, the Chancellor confirmed fuel duty will remain frozen for a 15th consecutive year and a ‘temporary’ 5p cut extended for a further 12 months.

Had Ms Reeves scrapped the 5p cut with immediate effect, the cost of a litre of both petrol and diesel would have increased by 6p, with a further penny added to the bill as a result in higher VAT charged on road fuels.

Tuesday’s average unleaded price of 135.3p would have theoretically jumped to 141.32p, while diesel would have risen from 140.3p to 146.3p.

Fuel duty – and VAT – already make up more than half of what drivers pay at the pumps. Currently, 56% of every litre of petrol is taxation – and 54% for diesel

This would have meant an average family car with a 55-litre fuel tank would have cost an additional £3.30 to fill up.

Over the course of a year, based on average mileage of 7,000 miles per annum, drivers could expect to have forked out an extra £48 on fuel receipts over the course of a year.

Despite the extension of the 5p-a-litre fuel duty cut, UK drivers are still paying some of the highest taxes on road fuels when compared to neighbouring countries.

A recent report published by Tax Foundation Europe found that only two EU countries charge the absolute minimum duty: Bulgaria and Malta.

DRINKERS, SMOKERS AND VAPERS

Your draught beer could cost 1p less per pint – but that’s unlikely given other cost rises for pubs

If you enjoy a pint of real ale we’ve got some good news: the draught duty on alcoholic drinks is falling by 1.7 per cent.

Ms Reeves said this would lead to ‘a penny off a pint in the pub’ – although this is unlikely due to pubs facing higher costs such as a hiked minimum wage and, for larger businesses, steeper employers’ national insurance contributions.

‘Nearly two-thirds of alcoholic drinks sold in pubs are served on draught,’ Ms Reeves told MPs.

‘So today, instead of uprating these products in line with inflation, I am cutting draught duty by 1.7 per cent, which means a penny off a pint in the pub.’

This means that all other tipples such as wine, whisky and gin, will be increase as producers attempt to offset the hike.

But pubgoers buying draught beer and lager at their local will see a slight reduction of a penny.

This graphic shows Britain’s cheapest and most expensive cities for pints

… but you’ll likely have to pay more for wines and spirits

The Budget was far from good news for all drinkers, with wines and spirits set to cost you more due to a RPI-linked rise in duty on non-draught products.

The latest hikes to duty on wine and spirits follow increases in August last year that were the largest in almost 50 years, adding 20 per cent to excise duty on more than 85 per cent of all wines on the UK market and more than 10 per cent to duty paid on full strength spirits.

Alcohol duty is paid by manufacturers when they make their products.

In general, spirits and wines are taxed more heavily than ciders and beer due to their stronger alcohol content.

The duty is generally passed onto consumers by manufacturers, but product price increases are at their discretion.

You could have to pay 54p more for a pack of 20 cigarettes and £1.40 more for a bottle of vape fluid

Smokers have always been a popular target for chancellors hungry for revenue, and this Budget was no different.

If it’s bad news if you are a vaper too, with a new flat rate duty on all vaping liquid coming in from October 2026.

This will introduce a toll of £1-3 per 10ml vape liquid, increasing depending on nicotine levels. Experts warned it would see the average UK vaper spending almost £73 a year on the habit, with the cost of a £4 e-liquid bottle swelling to £5.40.

According to Treasury figures, tax rises mean smokers can expect to pay 54p more for a packet of 20 cigarettes, while 30g of rolling tobacco will have an extra £2.32 added to the price.

There will also be a 27p jump per 10g of cigars, a 35p rise for 30g of pipe tobacco and a price increase of 13p for a 6g pack of heating tobacco – a move that will be a bitter pill to swallow for smokers.

PARENTS AND CARERS

You could pay around £3,300 more if you have a child at private school

Starting in the new year fee-paying schools will no longer be exempt from the tax, and from April will get no business rate relief, as the government looks to fund 6,500 extra teachers for state schools.

This will cost 3,300 for parents paying the annual average of £16,656.

Nine in ten parents are currently able to fund their children’s education through wages and income from investments.

But, once 20 per cent VAT is levied on fees by the Government in what has been dubbed an ‘act of class war’, as many as 27 per cent of parents are likely to fall short and many are likely to take on extra debt, according to the research from specialist lender Pepper Money.

Of those, 41 per cent plan to use unsecured debt – 23 per cent from credit cards and 18 pc via extra personal loans.

Currently, independent schools do not have to charge 20 per cent VAT on their fees because there is an exemption for the supply of education

Nearly one third plan to obtain money from property, with 13 per cent remortgaging, 12 per cent arranging a homeowner loan and 7 per cent selling an asset.

And some 19 per cent are set to take out a finance agreement with their school, while 16 pc plan to use gifts from family.

If you’re a carer, you may be able to earn ‘£10,000 more’ a year

If you are a carer you could win big from the Budget, with the weekly earnings limit for carer’s allowance rising to the equivalent of 16 hours a week at the national living wage.

Ms Reeves said: ‘Carer’s allowance currently provides up to £81.90 per week to those with additional caring responsibilities.

‘Today, I can confirm that we are increasing the weekly earnings limit to the equivalent of 16 hours at the national living wage per week, the largest increase since carer’s allowance was introduced in 1976.

‘That means a carer can now earn over £10,000 a year while receiving carer’s allowance, allowing them to increase their hours where they want to and keep more of their money.’