In a significant overhaul of the tax structure, Rachel Reeve's Budget included £40 billion in tax increases, with the most aggressive move being a drastic cut to the earnings threshold for employers National Insurance from £9,100 to £5,000, effective April 2025. This is coupled with an increased rate to 15%, marking a major shift in how employers will be taxed moving forward.
Particularly striking was the announcement that the main rate of Capital Gains Tax (CGT) will rise, aligning higher and additional rate taxpayers to a 24% rate from the previous 20%, and a jump to 18% for basic rate taxpayers from 10%. Unlike typical forecasts, these changes took effect immediately, catching many off guard, especially those who sold shares on the same day.
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