Budget 2024 predictions from inheritance tax to stamp duty and NHS spending - what it means for you

Chancellor will soon deliver Labour's first Budget in almost 15 years.

She has promised the country - but there are jitters at the top of government over spending plans for Whitehall departments. Some Cabinet ministers to raise their grievances with directly in an attempt to boost their departments spending power.

In a message to her colleagues sitting around the Cabinet table, Ms Reeves stressed there would be "difficult choices" on spending, welfare, and tax. She highlighted the £22billion black hole Labour claims to have inherited from the defeated Tory government that needs to be filled - just to keep public services "standing still".

And honouring the tradition of recent years, many of the government's plans have been leaked to newspapers, with speculation rife over tax plans. Here The looks at what could be in the Budget on October 30.

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National Insurance, VAT and income tax

During the election Keir Starmer made a vow not to increase taxes on "working people". The party's manifesto stated: "We will not increase National Insurance, the basic, higher or additional rates of Income Tax, or VAT". The PM has since insisted the Government will "keep our manifesto pledges" so expect these rates to remain the same.

But the Chancellor is considering extending the freeze on income tax thresholds - first introduced by the Tories - which could push more people into paying higher rates. Thresholds normally rise in line with inflation but imposed a freeze in 2021 to claw back cash after the Covid pandemic. It means more people are dragged into paying income tax - and higher earners can end up moving to another tax band.

People can earn up to £12,570 tax-free, before paying 20 per cent tax on everything between £12,570 and £50,270. Income above that is taxed at the higher rate of 40 per cent up to £125,140, after which there is a 45 per cent additional rate.

National insurance

Mr Starmer that the Government could hike national insurance for employers in the . He insisted the manifesto promised not to raise taxes on "working people" but dodged questions on whether that extends to employers national insurance contributions (NICs).

Ms Reeves has similarly hinted that businesses will face an increase to NICs. She suggested that Labour's manifesto pledge not to raise national insurance on "working people" was in relation to employees, as opposed to employers.

National insurance is paid by employees and employers on earned income only. Currently the main rate employees pay of their earnings towards national insurance is 8%. Rishi Sunak twice cut the main rate for employees from 12% to 10%, then from 10% to 8% this year.

Employers pay a rate of 13.8% for workers earning more than £9,100. The money does not come out of an employee's salary but is paid on top. Raising the rate by 1p would raise around £8.5billion for the Treasury.

NICs are not charged on other income sources like savings, pensions or property but Ms Reeves is said to be looking at changing the rules so that employers have to pay NICs on the money they put into their worker's pensions schemes. If this was brought in at the current 13.8%, it could raise £17billion. But the speculation has sparked fears employers will cut their staff pension contributions if NICs are introduced on them.

Stamp duty

Stamp Duty is a tax paid when you buy houses, flats and other land and buildings over a certain price in the UK. Currently housebuyers don't pay the tax if the property they are buying is worth less that £250,000, after which they pay a rate of 5% on the worth of the property up to £925,000, before it raises again. First time buyers don't pay stamp duty on properties worth up to £425,000.

Ms Reeves is expected to confirm that the thresholds will fall in March 2025 (which is already due to happen). It will mean a housebuyer will only be exempt from paying stamp duty if the property they're buying is worth less than £125,000 or £300,000 for a first time buyer. A return to the old thresholds is expected to raise £1.8billion a year by 2029-30.

Labour is also understood to be keeping to its manifesto pledge to increase stamp duty for non-UK residents, from 2% to 3%.

Fuel duty

Ms Reeves is expected to announce the end of the temporary 5p cut in fuel duty next year, which was introduced following the war in . The RAC, who would usually be against a rise in fuel duty, has admitted that drivers have not felt the benefit of the cut as sellers have not passed on lower prices to them, instead focusing on boosting their own profits.

The Chancellor is also said to be looking at ending the 13-year freeze on fuel duty though transport campaigners have issued a strong working that this could cause inflation to rise. In the summer Mr Starmer refused to rule out any changes to fuel duty.

Vape tax

Ms Reeves is considering hiking the tax on vaping products in a bid to tackle soaring rates of children picking up the habit. In Chancellor Jeremy Hunt's spring Budget, he unveiled plans to impose a new "excise duty" on vaping products from October 2026. The price rise will depend on how much nicotine is in the e-liquid, with a 10ml bottle of nicotine-free e-liquid to go up by £1 compared to a bottle with 11mg or more of nicotine to increase by £3.

But new Chancellor Ms Reeves is looking at ripping this and imposing the same rate of tax across all nicotine strengths. This is after anti-smoking campaigners warned the tiered tax system may put off smokers who need high strength nicotine products to help them quit. It is likely that any hike to vape taxes could be matched with an increase in tobacco tax, to ensure people are still encouraged to switch to vaping if they are trying to stop smoking.

Aid Budget

Spending on overseas aid is expected to be cut in the Budget. There are fears Ms Reeves could cut over £2billion from the pot of money. Foreign Secretary is among Cabinet ministers reported to be urging her not to make the cuts.

It comes as more than 120 charities warned the UK's international aid spending could fall to the lowest level its been in 17 years. They wrote to the PM warning him against the trend of diverting the foreign aid budget to support refugees and asylum seekers in the UK.

Infrastructure spending

Ms Reeves last week told reporters she will tweak debt rules she inherited from the Tories in order to invest billions in major infrastructure projects, such as schools, hospitals and railways.

Speaking in Washington DC, the Chancellor said without the change the UK would be forced to continue on the "path of decline". She said: "I don't want that path for Britain when there are so many opportunities in industries from life sciences to carbon capture, storage and clean energy to AI and , as well as the need to repair our crumbling schools and ."

The major change in rules, which could free up around £50billion, cannot be used for day-to-day government spending such as public sector pay. She said: "The reason we are doing that is because there are massive opportunities to invest in Britain and to get the growth and jobs of the future. But it's not possible under the current rules."

Inheritance Tax

Inheritance tax, which is charged at a 40% rate, only applies to wealthy people who have an estate worth £325,000. This rises to £500,000 if a home is given to a child or a grandchild - meaning a couple have a combined tax-free property limit of £1million when they die. According to Government figures, just 3.7% of all deaths in 2020-21 resulted in an inheritance tax charge.

Ms Reeves is said to be looking at increasing the 40% rate of inheritance tax, as well as considering limiting some of the relief or exemptions on certain inherited assets.

Capital Gains Tax

Mr Starmer has signalled he could hike taxes on people who get their money from property and shares. The PM dropped a major hint that capital gains tax - which is levied on the sale of assets - could rise in next week’s .

Asked if someone who works but gets income from shares and property was a working person, Mr Starmer said: “Well they wouldn’t come within my definition.” The PM’s official spokesman later clarified that was referring to people who “primarily get their income from assets”.

Capital gains is a tax you pay when you sell an asset which has increased in value. It applies to things such as second homes or shares not held in individual savings accounts (ISAs), but not to your main home as long as you've always lived there. It starts at a rate of 10% (or 18% on residential property) on profits above £3,000. For people who earn more money, the rate is currently 24% on gains from residential property or 20% on gains from other assets. Speculation has been growing that capital gains tax could be brought more in line with income tax, which could mean upping the higher rate from 20% to 45%.

NHS funding

Treasury insiders are warning the faces a £9billion black hole and without extra funding millions of appointments, scans and operations will be cancelled. They also claim it would lead to 21,000 senior doctors and 81,000 nurses losing their jobs while waiting lists would soar past record levels without emergency cash.

It is all but certain the Chancellor will announce a multi-billion pound funding package for the crisis-hit health service after promising to "fix the NHS" at a recent Cabinet meeting. The Mirror has previously reported the NHS will be at the heart of Ms Reeves's first Budget as the government hopes to slash record waiting lists.

Two-child benefit limit and welfare spending

The Chancellor is not expected to scrap the controversial two-child benefit limit introduced by the austerity-era predecessor George Osborne. The policy, which prevents people from claiming Child Tax Credits or for more than two children, has been blamed for trapping kids in poverty.

Despite repeated pleas from both Labour MPs and dozens of charities, the government has claimed it cannot afford to scrap the policy. Instead, ministers are expected to review it as part of a child poverty strategy being published in spring 2025.

The Chancellor is also said to be set on honouring the previous Tory government's plans to make around £3 billion of cuts to welfare by reforming work capability rules in the Budget. Under Conservative plans, welfare eligibility would have been tightened so that around 400,000 more people who are signed off long-term would be assessed as needing to prepare for work by 2028/29 - saving an estimated £3billion.

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