FACTBOX-Tax hikes and spending cuts: what is the new UK budget plan?

Existing increases planned for departmental budgets will be protected in cash terms until 2024/25, Hunt said - meaning a big real-terms cut with inflation running so high. Overall spending on public services will continue to rise in real terms for the next five years.

British finance minister Jeremy Hunt announced a series of tax hikes and a more austere approach to public spending in a tough budget plan on Thursday. Here are some of the changes:

TAX ON PEOPLE The highest earning Britons will now pay the top 45% rate of tax on income above 125,140 pounds, rather than 150,000 pounds previously. The previous administration of Prime Minister Liz Truss had tried to abolish the top rate altogether.

The government will freeze until April 2028 the threshold on the amount people can earn tax free as well as the level at which the higher rate of income tax kicks in, meaning that with inflation running high, people face paying more income tax. Hunt said he would cut the amount shareholders can earn in dividends before they begin paying tax from the current level of 2,000 pounds ($2,366) to 1,000 pounds next year and 500 pounds from 2024.

Because electric cars are increasingly common, Hunt said they will no longer be exempt from vehicle taxes from April 2025. TAX ON BUSINESS

Britain's tax on energy company profits will increase to 35% from 25% from January next year until March 2028. Hunt also announced a new, temporary 45% tax on electricity generators, designed to target profits made by low-carbon generators. Hunt said these changes will raise 14 billion pounds next year. Hunt froze the threshold at which employers pay National Insurance contributions - or social security - until April 2028.

Hunt said he will cut the business rates tax on company premises but commence a revaluation of business properties from April to make sure the tax reflects the value of properties. GOVERNMENT SPENDING

Public spending will grow but more slowly than the economy, Hunt said. Existing increases planned for departmental budgets will be protected in cash terms until 2024/25, Hunt said - meaning a big real-terms cut with inflation running so high.

Overall spending on public services will continue to rise in real terms for the next five years. Hunt said he would keep in place the so-called triple lock, which guarantees the state pension will increase by inflation, average earnings or 2.5% - whichever is strongest.