The Labour government’s second Budget was so widely leaked and trialled that it contained few surprises. Contained within it were multiple changes that the Chancellor announced were important to fix the public finances and raise £26 billion, putting the UK on course to have its highest tax burden - as a % of GDP - on record by 2030. In this review, Ed at Medics’ Money breaks down what this Budget means for doctors.

Income tax thresholds - the freeze continues

The Chancellor announced the continuation of a policy introduced by the previous Government in 2021 - the freezing of the Personal Allowance (affecting the whole of the UK) and the Income Tax thresholds in the UK outside of Scotland. These will now be frozen to 5 April 2031, longer than had been initially expected and continues what is known as 'fiscal drag', where taxpayers are pulled into higher income tax bands as their incomes rise. This raises substantial revenue for the government.