Speculation about the size of the black hole in the country’s finances and how the Chancellor was going to fill it was the backdrop to Budget day this Autumn, but on the day there were few surprises. Rachel Reeves stuck to her plan not to raise taxes through national insurance or income tax, which leaves us with a complex taxation strategy to unpick.
Perhaps the least surprising move was to extend the freeze on income tax bands and personal allowances for another three years (although for one more year than anticipated), sweeping another wave of basic-rate taxpayers into the higher-rate band, and tipping others over the higher-rate threshold. This extension to the boundary freeze is equivalent to a tax increase for anyone who gets a pay rise that takes them over a threshold.
In the feature for this edition of our newsletter we explore this and other key changes coming down the line, including a hike in dividends tax from April, plus a new limit on salary sacrifice arrangements from 2029/30and a revision to ISAs limiting cash holdings for under-65s from April 2027.
As the tax system becomes even more complicated, tailored advice will become increasingly important on how to best manage the interaction between income, savings, investments and tax.
Our other stories in this edition include:
- Understanding the inflation factor
- Can you afford your retirement?
- Help for healthy working
