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2025-11-03 17:20:54
[UK Budget Triggers Tax Seismic Impact, Millions of Taxpayers Face Heavy Burden] ⑴ Chancellor of the Exchequer Rachel Reeves plans to increase taxes by tens of billions of pounds in the November 26th budget to address a fiscal shortfall of up to £30 billion. ⑵ Income tax reform is a focal point, potentially raising the basic tax rate by 1-2 percentage points, expected to generate an additional £6-8 billion in revenue annually. ⑶ The proposed extension of the tax threshold freeze to 2030 is expected to raise an additional £8 billion, moving more people into higher tax brackets. ⑷ For high-income earners, the government is considering raising capital gains tax and introducing a 20% departure tax, involving the valuation of personal business assets. ⑸ The VAT system may be simplified, eliminating low or zero tax rates on goods such as food and children's clothing, potentially exacerbating inflationary pressures. ⑹ Pension system faces reform; employer contributions may be subject to social security tax, and the individual tax-free withdrawal rate may be reduced from 25%. (7) The tax-free allowance for savings accounts may be reduced, aiming to channel more funds into the UK stock market and stimulate capital market development. (8) The fuel tax freeze, which has been in effect since 2011, may come to an end, affecting £25 billion in tax revenue annually. (9) The tax burden on partnerships of professionals such as lawyers and accountants may increase, sparking strong protests from the industry. (10) Interest on excess bank reserves may be subject to a new tax, but industry insiders warn that this will curb credit issuance and drag down economic growth.
