British Budget: Bold Changes and Tax Hikes Unveiled

British finance minister Rachel Reeves announced significant fiscal changes in her latest budget statement, including tax hikes expected to raise 26.1 billion pounds by 2029/30. Key measures feature income tax threshold freezes, new taxes on luxury homes, and a shift to electric vehicle levies.

The British finance minister, Rachel Reeves, outlined her ambitious budget plans in Parliament on Wednesday, aiming to bolster the nation's finances with a projected 26.1 billion pounds increase in revenue annually by 2029/30. The Office for Budget Responsibility inadvertently released its outlook prematurely, calling it a 'technical error.' Key measures include freezing income tax thresholds, imposing a new tax on expensive homes, and maintaining the fuel duty freeze.

A distinct move in the budget is the introduction of an annual tax on homes valued over 2 million pounds, raising an anticipated 400 million pounds annually by 2029-30. The changes will affect properties evaluated at 2026 prices, starting from April 2028. Additionally, a mileage-based charge on electric vehicles will commence in April 2028, estimated to yield 1.4 billion pounds, offsetting expected declines in fuel duty revenues due to the shift towards electric cars.

Other notable changes include the removal of the two-child welfare cap from April, projecting a 3 billion-pound cost by 2029-30, alongside hikes in dividend tax rates and increased levies on gambling and alcohol. The 'motability' scheme, facilitating car leasing for individuals with disabilities, will undergo reforms to conserve taxpayer expenditures.

(With inputs from agencies.)