Budget 2025 latest: Sugar levy on milkshakes and lattes confirmed as first tax hike in Rachel Reeves’s Budget

With Labour’s second autumn Budget taking place on Wednesday, speculation about further tax rises has grown rife.

She has warned she will not be making “easy choices” at the fiscal event on 26 November, as No 10 looks appears less concrete on its commitment not to raise taxes on “working people”.

This means no increase to the headline rates of income tax, VAT or national insurance contributions.

The Independent’s Albert Toth reports:

EasyJet boss Kenton Jarvis has warned the Chancellor against a Budget move to raise air passenger duty as he said it would knock demand from holidaymakers.

There has been speculation that Rachel Reeves will increase air passenger duty, which is a tax on flights leaving the UK, in the Budget on Wednesday.

Mr Jarvis said this duty on UK flights was already “one of the highest in Europe”.

He is hoping Ms Reeves will freeze air passenger duty, cautioning that any increase would “naturally dampen demand”.

The Independent’s Business and Money Editor Karl Matchett reports:

The sterling is up against the dollar and the euro in morning trading today, an indication of market caution ahead of the Budget.

£1 rose to as much as $1.314, but has since settled back to be about 0.03 per cent up for the day. It’s expected that higher volatility is on the cards this week as traders balance eventual outcomes of the Budget against economic implications.

“We are considering the potential for a break below $1.30 on the Budget should it fail to land cleanly. We expect heightened volatility around this event so watch out,” said Saxo UK strategist Neil Wilson.

As for what it means for Rachel Reeves and co tomorrow, the best case scenario is a “holding ground” when it comes to the bond market, adds Richard Potts, an economist at Bondford.

“For currency traders, the Budget will serve as a real-time credibility test. A rally in sterling is unlikely given the expected fiscal tightening, but if the pound holds its ground, it will signal that investors see the Chancellor’s measures as credible and sufficient to stabilise the public finances without necessarily derailing growth,” he explained.

A tax raid on salary sacrifice schemes could be announced in Wednesday’s Budget, reports suggest, raising fears that some people’s retirements could be put at risk.

Salary sacrifice schemes allow people to “give up” a chunk of their salary for a different benefit from their employer.

Employers may offer salary sacrifice as part of their pension scheme as a tax efficient way to help workers boost their pots.

When someone pays into a pension using salary sacrifice, the employer will pay the whole amount into the employee’s pension, including the employer’s contribution.

Estate agents have warned the speculated mansion tax could “create more uncertainty” in parts of the property market.

The mooted move will create more uncertainty at the highest end of the property market, due to its predicted escalatory nature, at a time when the market is already under pressure as a result of Budget speculation since the summer,” Dominic Agace, chief executive of estate agents Winkworth said.

“Guidance will need to be provided swiftly on the highest potential tax charge, so everyone can adjust accordingly.

“With non dom tax changes, VAT on school fees and mortgage rate increases, this will just add to more pressure on those living in these homes worth £2m upwards, particularly in London where owners may have leveraged up to buy them.”

The Independent’s Albert Toth reports:

Speaking at a conference in London, Mr Streeting discussed his own childhood, where his family faced poverty in London’s East End.

While listing the achievements of the party in government on child poverty, including free school breakfasts for primary school children, he insisted more needs to be done.

Farmers have been forbidden from bringing their tractors to protest outside parliament on Wednesday as Rachel Reeves unveils her budget.

The Metropolitan Police said that while protests would be allowed, people are prohibited from bringing vehicles, including tractors and agricultural vehicles.

The force said the decision had been taken because of “serious disruption” the vehicles may cause to the local area, including businesses, emergency services and the public.

In an event page set up for the protest by a group called Berkshire Farmers, organisers said that farmers were planning to drive to London to “demand fairness and a future for British farming”, saying that the current inheritance tax system “threatens family farms and rural livelihoods”.

An administrator of the Berkshire Farmer Facebook group said the Met Police’s announcement that it was imposing the conditions with “this short of a notice” was a “malicious approach to preventing our right to protest, leaving little time for appeal or for facilitating their requests”.