UK Finance Minister Healey's First Budget: Major Measures Announced for 2024
Key Measures from Healey's 2024 Budget
LONDON, Oct 28 (Reuters) - British finance minister John Healey delivered his first budget on Wednesday, including an increase in bank taxes to try to ease the impact of surging energy prices on households.
Below are the key measures he announced:
Bank Tax
Increased Surcharge on Bank Profits
Healey will double a tax surcharge on banks's profits above a set threshold to 6% for 15 months, less than lenders had feared.
Tax Crackdown on Online Marketplaces
VAT Collection Responsibility
Online marketplaces like Amazon, eBay and Temu will be responsible for collecting value-added tax owed by retailers selling on their platforms from October 2027. This will help fund business rate cuts for physical stores.
Energy Relief
Direct Payments to Households
Twenty million households will receive a £100 payment to deal with rising energy bills.
VAT Cut Extension
A temporary cut to value-added tax on electricity bills will be extended until July.
Standing Charges Removal
Standing charges on domestic gas bills, which currently add around £108 a year to bills, will be scrapped as soon as next year.
Fuel Duty Freeze
Healey will maintain a freeze on fuel duty rates, extending a temporary cut made in 2022 until at least July.
Minimum Wage
Wage Rate Increases
The minimum wage rates for both workers aged 18-20 and workers over 21 will increase by 3.9%.
Devolution
Regional Tax Retention
England's regional mayors will be able to keep 20% of business tax rates from next year and a share of income tax rates from 2028.
Property Tax Relief to Small Businesses
Business Rate Threshold Increase
Small retail, hospitality and leisure businesses will start paying business rates -- a property tax charged on commercial properties based on their rateable value, or an official estimate of annual open-market rental value -- at £18,000 instead of £12,000. As a result 70,000 businesses will not be charged the rate.
Gambling
Slot Machine Tax Increase
The tax on the net takings from some slot machines will increase to 25% from 20%.
Defence
Defence Investment Plan
A funding gap in Britain's Defence Investment Plan will be filled by further reducing departmental capital budgets and using "unallocated contingency in the Treasury's capital reserve".
Support for Ukraine
The government will provide Ukraine with £500 million of emergency funding, £7 billion of economic support over three years and £3 billion in export finance capacity.
Tax-Free Cash Saving Allowance Cut Scrapped
Reversal of Planned Allowance Cut
Healey reversed plans to slash the amount that people can invest in tax-free cash savings, keeping it at £20,000 for all investors instead of a cut planned by his predecessor to £12,000 for under-65s.
Housing
First-Time Buyer Loan Scheme
Lower-income first-time buyers will be able to draw on a loan scheme funded by £4.7 billion of government-backed lending from next year.
Affordable Homes Funding
Healey will spend an additional £1.5 billion to speed up the building of affordable homes.
Biodiversity Requirement Removal
He will also remove biodiversity requirements for small housing developments on previously developed land.
Data Centre Covenant
Community and Environmental Investment
Data centre operators will be required to invest in their local communities, create jobs and protect water supplies in return for priority grid connections and permission to build on-site power generation where necessary.
Investment
Funding for National Lender and Infrastructure Bank
Britain's national business lender and infrastructure bank will receive £15.4 billion and £5 billion of extra funding respectively over roughly half a decade.
Rough Sleeping
Increased Support for Rough Sleepers
Britain will double spending to help rough sleepers off the streets with a further £432 million over the next two years.
(Reporting by Yoruk Bahceli; editing by William James)
