Budget 2026: Key points at a glance

Chancellor of the Exchequer John Healey holding the traditional red budget box outside 11 Downing Street Rasid Necati Aslim/Anadolu via Getty Images

Chancellor John Healey has set out the government's tax and spending plans in his Budget – the first since Andy Burnham became prime minister.

Here is a summary of the main points.

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Energy bills and cost of living help
  • One-off £100 payment for up to 20 million households in council tax bands A-D in England to help deal with rising energy bills, with equivalent funding for Scotland, Wales and Northern Ireland

  • Standing charges – fixed daily fees customers pay regardless of usage – to be removed from household gas bills in England, Scotland and Wales, with costs added to the unit rate instead

  • VAT cut on electricity bills extended to July

  • A green levy - the Gas Shipper Obligation to fund hydrogen projects - to be removed from energy bills and put on to general taxation

  • Freeze on fuel duty extended again to July

  • Import taxes to be removed on more than 100 food products, including gherkins and marmalade, as well as kerosene and fertilisers

  • A 55p per mile tax-free mileage rate for those driving up to 10,000 miles for work made permanent, with the rate rising from 25p per mile to 35p above that distance

  • A new scheme taking 25% off electricity bills for 10,000 energy-intensive businesses to launch in April, with payments backdated for energy costs this year

Taxes
 "To Let" signs outside residential properties Chris Ratcliffe/Bloomberg via Getty Images
  • An extra 2% tax on income from savings and property rental from April

  • Amount people can put into tax-free cash Isas (Individual Savings Accounts) to remain at £20,000 a year, with plans to lower the limit to £12,000 for under-65s scrapped

  • Surcharge banks pay on their profits to rise from 3% to 6% for 15 months, starting in January

  • Threshold at which High Street shops start paying business rates in England to be increased from £12,000 to £18,000, meaning businesses would pay no rates on properties with a rateable value below this level

  • Taxes on gambling machines with stakes over £1 to rise from 20% to 25%

  • Online marketplaces like Amazon, eBay and Temu to be made responsible for collecting VAT owed by sellers using their platforms

Wages, benefits and pensions
Housing and property
Homeless people sleeping rough on the streets in London Rasid Necati Aslim/Anadolu Agency via Getty Images
Devolution
  • All business rates to be retained locally by the end of the decade, with mayors to keep 20% of revenue from next year

  • A share of income tax receipts to go to mayors from 2028

  • Government to work with mayors to design a £1.5bn borrowing facility, enabling investment in larger projects

Defence
Three members of the Special Operations Forces practise their rapid deployment techniques with a Mk.6 CH47 Chinook helicopter, which is in the background
Other measures
UK growth, inflation and debt
  • Office for Budget Responsibility (OBR) predicts the UK economy will grow by 1.2% this year, up from a previous estimate of 1.1%

  • Growth then expected to slow to 1% next year, a downgrade from the watchdog's previous forecast of 1.6%, before lifting back to 1.6% in 2028

  • Inflation – the rate prices rise – is predicted to average 3.1% this year and then 3.4% in 2027, a hike on previous forecasts, before declining to the government's 2% target in 2028

  • Government borrowing is predicted to be higher than previously expected in every year of the latest forecast

  • But borrowing as a proportion of GDP is forecast to fall to 4.2% this year, dipping each year of the forecast to 1.8% in 2030/31

  • UK national debt set to rise from 96% of GDP this year to 97% in 2028/29, before falling back to 96% in 2031

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Original source Budget 2026: Key points at a glance

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