AS working Bits have been pelted by a raft of tax rises in the Budget, use our calculator to see how much Rachel Reeves has picked your pocket.
The Chancellor unleashed £26billion worth of tax hikes in her Budget yesterday – but not before the ENTIRE document was leaked by the Office for Budget Responsibility.
Ms Reeves’ Budget was picked over by experts as one which unnecessarily splurges on welfare while hitting Britain’s hard workers hardest.
The Joseph Tree Foundation warned that the average household will now be £850 worse off the course of Parliament (up until November 2029).
While the Resolution Foundation’s chief executive warned that it will be from 2028 when “most of the pain from this Budget will be felt”.
This is when salary sacrifice changes and a “mansion tax” come into force alongside an extended deep freeze on income tax thresholds.
The think tank has also said that millions of workers “would have been better off” if Ms Reeves had raised the income tax rate, as opposed to freezing thresholds.
The freeze in income tax thresholds, which will remain in place for until 2030/31 tax year, will create a process called fiscal drag.
This is where people are dragged into higher tax band as wages go up – but the thresholds are stuck at the same rate.
It will lead to a whopping 780,000 more basic rate taxpayers and 920,000 more higher rate taxpayers.
Meanwhile, the Government will limit how much workers can pay into their pensions tax-free via salary sacrifice – £2,000 a year.
There’s also been a fresh raid on booze as the Treasury has confirmed alcohol duty will rise in line with inflation, making your favourite tipple pricier.
Those who love a pint will be gutted to hear a four pack of lager (330ml) sold in supermarkets will rise by 6p per pack, and packs of cider by 2p.
Measures announced in the Budget include…
Here, we reveal EXACTLY how you’ll be hit by Rachel Reeves‘ Budget.
Accountant Blick Rothenberg has created a calendar exclusively for Sun Money showing how much you pay as a result of the Budget measures.
By putting in your age, marital status, number of children and whether you get child benefit into the helpful calculator, you can see how your finances will be hit.
Scroll along to input other information such as your and your partner’s annual salary, and the tax band for your car.
Firstly, the calculator will tally up how much you’ll pay as a result of frozen National Insurance and Income Tax thresholds.
The Chancellor froze income tax AND National Insurance thresholds until April 2031 – marking a three year freeze.
Separately, the calculator also lists how much how you’ll pay in car tax, after it was revealed in the Budget that Brits with electric cars will have to pay a new road tax.
The Chancellor confirmed a new 3p pay-per-mile tax, which will come into force from April 2028.
While a 5p cut to fuel duty that was introduced during the pandemic will ONLY remain in place until September – after which, prices are set to creep up through a staggered approach.
The calculator will also show how much your favourite tipple will go up by after Ms Reeves announced that alcohol duty would rise in line with inflation.
Budget is ticking timebomb – how long before it blows up society & Labour?
By JACK ELSOM, Political Editor
THE clue ought to be in the name “Labour”, founded more than 100 years ago as the party of the workers.
Those same workers are the losers of a Labour Budget that has rinsed them while the dole queue grows.
More than a million will be dragged into paying higher rates of income tax as a result of Rachel Reeves’ decisions.
The Chancellor put it best herself last year when she promised to unfreeze these thresholds because extending them “would hurt working people”.
How weasel those words now sound to the scores of grafters, grinders and strivers who rise each morning to make an honest living.
All while the long-promised action to tackle our eye-watering benefits bill has been ducked yet again.
Far from reining in ballooning welfare spending, today’s Budget will increase it by £9billion.
And Labour MPs – many who seem increasingly out of touch from their voters – are delighted.
They have extracted their flagship demands of abolishing the two-child benefit cap, on the back of other wins in torpedoing other cuts.
And they were licking their lips as Ms Reeves announced a “mansion tax” and higher “gambling taxes”.
The Chancellor’s repeated insistence that this was a Budget were “my choices” had all the conviction of a hostage reading out their captor’s script.
She might have succeeded today in placating her restless MPs – but at what cost?
For the economy, a shrinking number of workers subsidising a growing number of benefit claimants is a ticking timebomb.
For society, those that set their alarm clocks to go to work risk seriously resenting those who don’t.
And for Labour, they risk falling through the electoral chasm of that new defining faultline in British politics.
The Treasury has confirmed that it will go up by 3.66%, in line with Retail Price Inflation (RPI).
It means that a 70cl bottle of gin will go up by 38p under the hikes, which will come into force from February, for example.
If you’re a smoker, then you’ll see how much you’ll be stung by a tobacco duty rise.
The Treasury confirmed tobacco duty rates will increase by an RPI inflation figure of 3.66% plus an additional 2%.
As it stands, the average 20-pack of cigs costs around £16.78, but come 6pm tonight it will cost £17.74.
What else was announced?
Ms Reeves also launched a huge tax raid on workers’ retirement savings by announcing she will limit how much workers can pay into their pensions tax-free via salary sacrifice.
Salary sacrifice allows workers to exchange part of their salary for a pension contribution from their employer.
The slice of the pay they give up isn’t subject to National Insurance, so both employees and employers save money.
But workers will now be forced to pay the full rate of National Insurance on any contributions they make over £2,000 a year from April 2029.
Reeves also announced that she will keep the £20,000 limit per year that can be saved tax free, but that only £12,000 can be in cash – the remaining £8,000 must be put into investments.
While families on benefits will get a huge boost to their income as the government is to scrap the two-child benefit cap.
