The upcoming budget will outline some big changes this year. We are expecting the budget, delivered by Rachel Reeves, to reshape taxes, social spending and pensions for 2026.
Taxes
Income tax thresholds are expected to remain frozen. Higher-value property owners are expected to face a special new council tax surcharge on homes valued above two million pounds. Taxes on savings, dividends and rental income are also expected to increase by a small percentage, targeting the wealthier individuals who receive a large portion of their income from investments rather than actual salaries.
If you would like further advice, contact accountants Chippenham for advice. You’ll find that accountants Chippenham will be able to help guide you to assess the budget.
Social Support Spending and Benefits
The budget is expected to provide some relief for households on lower and middle incomes. We expect the budget to also make a significant change to family support by abolishing the two-child benefit cap.. At a national level, lifting the cap is likely to reduce the child poverty rates significantly and cut the number of children growing up in households below the breadline. According to official estimates, this change is expected to lift around 450,000 children out of low-income poverty.
Pensions
Pension contributions through salary sacrifice are expected to face caps, limiting the tax advantages and affecting higher earners the most. These changes are expected to raise significant revenue over the medium term. The potential cap reduces the incentive for higher earners to channel large portions of their salary into tax-efficient pension schemes.
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