Businesses will bear the brunt of chancellor Rachel Reeves’ much anticipated (and leaked) first budget as she introduced a £40billion tax hike.
£25billion of that will come from a jump in employer’s national insurance contributions.
Reeves announced it will go up by 1.2 percentage points, to 15%, from April next year. The threshold at which it gets paid will come down from £9,100 per year to £5,000.
The “Marmite” policy of adding VAT to private school fees – loved and hated in equal measure – is expected to hit the sector hard.
But it’s not all bad news… the chancellor has extended the freeze on fuel duty, which had been expected to rise.
She also backed high streets and the hospitality industry, which are suffering from the effects of the cost-of-living crisis and changes in shopping habits.
Reeves announced 40 per cent relief on business rates for the retail, hospitality and leisure industry in 2025-26, up to a cap of £110,000 per business.
The small business tax multiplier will be frozen next year. And permanently lower tax rates will be introduced for retail, hospitality & leisure properties from 2026-27.
A Covid Corruption Commissioner will be appointed to sniff out contracts which may have been awarded during the pandemic without following proper procurement procedures.
And former Ministry of Defence chief operating officer David Goldstone CBE is announced as chair of the new Office for Value for Money.
In moves that will be welcomed by the construction and facilities management sectors the chancellor announced £6.7billion of capital investment in schools, and a landmark £22.6 billion investment in day-to-day health spending.
She said: ‘Let me set out what this funding is delivering. Many NHS buildings have been left in a state of disrepair. So we will provide £1bn pounds of health capital investment next year to address the backlog of repairs and upgrades across our NHS to increase capacity for tens of thousands more procedures.
“Next, we will provide a further £1.5bn pounds for new beds in hospitals across our country, new capacity for over a million additional diagnostic tests and new surgical hubs and diagnostic centres so that people waiting for their treatment can get it as quickly as possible.
“The health secretary will be setting out further details of his review into the new hospital program in the coming weeks and publishing in the new year. But I can tell the house today that work will continue at pace to deliver those seven hospitals affected by the Raac crisis.
“And finally, because of this record injection of funding, because of the thousands of additional beds that we have secured, and because of the reforms that we are delivering in our NHS, we can now begin to bring waiting lists down more quickly and move towards our target for waiting times to be no longer than 18 weeks by delivering on our manifesto commitment for 40,000 extra hospital appointments a week.”
