Budget 2024: Here are 10 things expected to be included in Rachel Reeves' first budget

Chancellor of the Exchequer Rachel Reeves is preparing to deliver her first budget. | Getty Images

Chancellor of the Exchequor Rachel Reeves is preparing to deliver her first budget on Wednesday, October 30 and has already warned that it has involved her making some “difficult decisions”.

It comes weeks after the new Labour government claimed it had inherited an unexpected £22 billion ‘black hole’ in the public finances from the former Conservative administration.

And it’s been reported that the Budget, which outlines the government’s financial plans for the coming year, will include tax rises and spending cuts to the value of £40bn.

Here are 10 things you can expect to hear - and not hear - on Wednesday.

1. An increase in inheritance tax

Inheritance tax is currently charged at 40 per cent on the estate of those who leave over £325,000 in money, goods and property when they die, although there are various exemptions (most notably no inheritance tax is levvied on money left to a spouse or civil partner).

Around four per cent of deaths result in inheritance tax being collected, equating to around £7billion per year.

It’s expected that the government will either raise inheritance tax, lower the threshold, scrap exemptions (such as that which means that gifts given seven years before you die do not attract tax), or a mix of all three.

2. An increase in National Insurance contributions by employers

Before winning the election Labour pledged they would not raise employees’ National Insurance, but they have repeatedly failed to rule out employers’ National Insurance contributions being raised.

One way to for this would be to make companies pay National Insurance on pension contributions they make for employees, which are currently exempt.

3. Income tax and National Insurance freeze

Labour have repeatedly said they will not be raising employees’ income tax or National Insurance, but that doesn’t mean that we won’t be paying more in real terms.

The level of income at which people start paying tax, or start paying higher rates, used to rise in line with inflation, but have been frozen since 2022.

Expect Reeves to extend the freeze, meaning in real terms workers will be taxed more. More money will be raised as more people end up paying highesr taxes as wages increase.

4. A rise in Capital Gains Tax

Capital Gains Tax is charged on profits made by selling assets, including second homes.

Currently it’s charged at 24 per cent on profits from property sales and 20 per cent on everything else. It raises around £14billion per year.

Expect this to be increased by at least a couple of percent in the budget.

5. No pay-per-mile road tax

It has been widely reported that Labour have been considering bringing in a new pay-per-mile road tax, with rumours circulating that it could be set as high as 15p per mile.

If it ever was on the cards, it seems to now have been dropped, so average car drivers will not be facing a tax increase of up to £1,500.

6. Stamp Duty back to normal

In 2022 the Conservative Govenment raised the rate at which people start to pay stamp duty when buying a home - from £125,000 to £250,000 (and from £300,000 to £450,000 for first time buyers. The raise is only temporary though, lasating until March 2025, but Labour don’t seem likely to renew it.

While this will raise extra cash it does not apply in Scotland, where Stamp Duty is payable on all primary properties above £145,000.

7. Fuel duty up

Since 2011, fuel duty has been frozen or cut by successive governments, most recently by 5p in 2022 due to the global energy crisis.

Expect Reeves to end this trend, perhaps by resurrecting the ‘fuel duty escalator’ first introduced by the John Major government in 1993 which increases fuel duty rates in line with inflation each year.

8. Bad news for non-doms

Non-doms are wealthy residents who live in the UK but have their ‘permanent home’ abroad and so do not pay tax on money they earn outwith the UK.

The former conservative government were intending to abolish non-dom tax status and it’s expected Reeves will announce - at the very least - measures to toughen up the system.

9. No wealth tax

There has long been talk of a tax on the super-rich, or so-called ‘one percent’, with a cross-party group of MPs currently calling for a two per cent tax on wealth above £10 million to raise around £24billion a year.

The Chancellor seems to have ruled out any new taxes though, so multi-millionaires can breathe a sigh of relief...for now.

10. No way out of paying VAT on private schools

Labour has confirmed plans to introduce VAT on private school fees from January 2025 - pushing fees up by 20 per cent and raising £1.6 billion annually. There was a loophole whereby parents could pre-pay fees before the chance in the law. This loophole is likely to be closed by Reeves.