Labour announce wave of tax hikes in landmark Autumn Budget – London Business News | Londonlovesbusiness.com

Chancellor of the Exchequer Rachel Reeves today presented the first government’s Autumn budget, unveiling measures to address a £22 billion “black hole”, boosting investment and fostering long-term economic growth.

The Chancellor reaffirmed Labour’s commitment to avoid austerity, filling budget shortfalls primarily through targeted tax reforms and introducing new investment.

The budget reflects Labour’s pledge to protect “working people” from tax hikes while introducing targeted increases to address fiscal pressures and support economic growth.

The Chancellor announced an increase in the lower rate of capital gains tax from 10 per cent to 18 per cent, and the higher rate from 20 per cent to 24 per cent, with property CGT maintained at 18 and 24 per cent in order to encourage investment.

Thomas Balashev, Founder and CEO of Monta Capital, commented: “Investors can breathe a sigh of relief with the exemption of buy-to-let properties from capital gains tax in the Autumn Budget. Tax hikes would have had a significant impact on the UK real estate market, potentially prompting a rush to sell properties, disrupting market activity and stifling investment in development, with smaller investors and local economies being hit particularly hard.”

“From an institutional real estate standpoint, this policy is a clear signal for ongoing investment in commercial real estate (CRE) projects. With the stability of tax policies, institutional investors can feel confident allocating capital to long-term ventures, reinforcing the UK’s position as a key player in the global market. Predictable regulatory frameworks give firms the confidence to plan ahead, focusing on sustainable urban regeneration, expanding mixed-use developments, and breathing new life into underused assets. Steady market conditions also help to address the ongoing supply-demand challenges in key sectors like industrial, office, and retail spaces, creating a positive environment for growth and innovation.”

As part of the Budget, Rachel Reeves has increased employer national insurance contributions from 13.8 per cent to 15 per cent, expected to raise £10 billion over two years.

Fraser Stewart, Co-founder of Lyfeguard said “Labour repeatedly outlined in their manifesto that they would not raise Income Tax, NI or VAT but clearly, this promise did not cover employers’ National Insurance payments. This change will be felt hardest by small businesses who will feel the direct impact of this increase in tax contributions.”

“However, the Business Tax roadmap is an encouraging move from Reeves, enabling businesses to understand Labour’s direction of travel with sufficient time to plan for what might be coming. What we need now is a growth roadmap, with Labour demonstrating a clear commitment to SMEs within the UK.”

The Budget also included new borrowing of up to £53 billion earmarked for key projects including HS2, NHS upgrades and school constructions.

Labour also reaffirmed their commitment to a “genuine living wage” with an increase to £12.21 set to align with inflation.

The budget follows the government’s introduction of the Data Use and Access Bill last week, a set of new data laws aimed to improve public services and boost the UK economy by £10 billion.

The data bill will unlock the secure and effective use of data for the public interest, without increasing pressure on the UK’s finances.

Stuart Munton, Chief for Group Operations & Technology at AND Digital said, “ The Introduction of the Data Use and Access Bill marks a pivotal moment in harnessing the power of data to enhance both public services and economic growth. Data is increasingly becoming a cornerstone for both public and private sector innovation and is driving efficiencies that were once unimaginable.

“But while it presents significant opportunities for innovation and efficiency, it will require strict security considerations and skilled professionals to manage data responsibly and protect privacy. By implementing robust security measures, ensuring data transparency and upskilling the workforce to handle data ethically, businesses will thrive under this new legislation.”