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The chancellor has said that the current tax system for non-doms will be abolished – and confirmed a 2p cut to national insurance.

In the budget, Jeremy Hunt said “permanent cuts in taxation” were possible because of the progress made in bringing down inflation – with forecasts suggesting it will fall to the target level of 2% within months.

Scrapping the “non-doms” regime, which allowed certain wealthy individuals to avoid paying tax on their foreign income, is expected to raise £2.7bn a year.

Budget live: No rabbit out of the hat on income tax from chancellor

Mr Hunt spoke about cutting taxes to increase growth, and the official Office for Budget Responsibility (OBR) forecast predicted that living standards will grow faster than expected.

But real disposable household disposable income is not expected to recover to pre-pandemic levels until the 2025-26 period, after the next election.

And the tax burden is also set to continue to rise – albeit at a slightly reduced level when compared to last autumn’s forecast.

More on Budget

In total, the government will take £19.7bn more in tax by 2029 than forecasted in March 2021, even when the cuts to national insurance are included, due to fiscal drag.

Read more:
What key budget terms mean – fiscal drag, headroom and tax thresholds
The key announcements of the 2024 Budget

What is the non-dom tax status

Removing the non-dom tax regime is a move straight from Labour’s playbook.

Potentially designed to take the wind out of Labour’s sales, it takes away a clear dividing line between the parties’ policies.

A non-dom is someone who lives in the UK but whose permanent home is abroad.

The term is short for non-domiciled individual.

Under the UK’s current regime they only pay tax on money earned in the UK, their income and wealth from outside the UK isn’t taxed.

As a result, rich people make considerable savings if they choose to be tax domiciled abroad.

Non-doms can benefit from the tax arrangement for up to 15 years.

But that’s to change.

Labour wanted this to be cut just to four years. And that’s just what Chancellor Jeremy Hunt has done.

For those currently using the non-dom tax system “transitional arrangements” will be made, Mr Hunt said, including a two-year period in which individuals will be encouraged to bring wealth earned overseas to the UK.

This measure will attract an additional £15bn of foreign income and gains and generate more than £1bn of extra tax, he said.

In terms of spending, Mr Hunt earmarked almost £6bn for the NHS – with artificial intelligence set to be used to “cut form-filling for doctors” in a digitisation drive.

A 5p cut to fuel duty will be extended for another 12 months – with the government “backing the Great British pub” by holding the price of beer, wine and spirits steady until February 2025.

Meanwhile, Britons will be able to invest up to £5,000 in UK companies tax-free – in addition to their current ISA allowance – through a new “British ISA”.

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Chancellor cuts national insurance in budget

He also announced:

• The High Income Child Benefit Charge threshold will increase from £50,000 to £60,000

• A new excise duty on vaping, as well as a one-off increase to tobacco duty

• The higher capital gains tax rate on property will fall from 28% to 24%

• The VAT registration threshold will rise from £85,000 to £90,000 from 1 April – the first increase in seven years

• A fund aimed at supporting vulnerable households with the cost of living will be extended by a further six months

• The UK economy is expected to grow by 0.8% this year – and 1.9% in 2025

• Hundreds of millions of pounds to tackle “historic underinvestment in our nations and regions”

The 2p cut to national insurance was widely trailed – and follows a previous 2p cut announced in the autumn statement. Combined, this could save the average worker up to £900 a year.

But the chancellor had faced calls from Tory MPs to cut income tax or unfreeze tax thresholds to prevent Britons from being dragged into higher bands when they get pay rises.

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Awkward wait for chancellor outside No 11

Drab fiscal statement will cool May election rumours

We were promised a tax cutting budget, and we got a tax cutting budget.

The budget this year was a bit more straightforward than usual – with big announcements pre-briefed ahead of time, and no big standout measures held back to surprise voters with.

The chancellor cut national insurance by the expected two percentage points in a move that impacts 27 million people, worth £450 per year for the average person.

Capital gains tax will also be reduced, but the slightly more flamboyant move was stealing Labour’s proposals to scrap the non-dom tax status loophole and replace it with a new residency based system.

It means that an extra £2.7 billion a year will be used to fund tax breaks elsewhere in the budget.

There was a lot of pressure riding on Jeremy Hunt today among swirling chatter in Westminster of a May election, but this rather drab fiscal statement may have cooled those rumours.

But both parties could still be accused of electioneering today.

Mr Hunt thanked a list of Conservative MPs for their lobbying and campaigning as he announced certain measures, and even sometimes name checked the constituencies they represent.

Labour were much louder in their disagreement than usual, heckling the chancellor barely two minutes in.

The chancellor even started his speech at the despatch box with a bizarre, unrelated reference to Israel and Gaza, in a striking example of just how much the conflict has impacted UK politics since 7 October.

In terms of the immediate offerings, Jeremy Hunt confirmed the 5p fuel duty cut will continue, after it was due to expire at the end of March and confirmed a continuation of the alcohol duty freeze.

The Household Support Fund has also been extended for another six months.

There were elements in there for savers too, a new British ISA was announced allowing another £5,000 on top of existing ISA offerings and further tax relief for creative industries.

There was also a noticeable pivot back to more traditional Conservatism.

With the Conservatives 20 points behind in the polls, the chancellor must have been hoping that his budget can turn around Tory fortunes.

But today showed that for him this mission is clearly more of a marathon, not a sprint.

Mr Hunt is already facing anger from Scottish Conservatives, after he announced an extension of the windfall tax on profits made by energy companies in the North Sea.

The leader of the Scottish Tories, Douglas Ross, said he would not vote with the legislation – implying he would either oppose or abstain on the motion to introduce the measure.

Andrew Bowie, a Tory minister, said the will be “working with” Mr Ross to “resolve” the matter.

Labour leader Sir Keir Starmer said the budget was “bereft of ideas”.

This budget is set to be the last before the election – with Mr Hunt under pressure to revive economic growth and the government’s prospects at the ballot box.

The UK economy slipped into a technical recession at the end of last year, and the Tories are about 20 points behind in the opinion polls.

Money blog: What budget means for you

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Why don’t we know when the UK election is?

Before the budget was announced, shadow chancellor Rachel Reeves said: “The Conservatives promised to fix the nation’s roof, but instead they have smashed the windows, kicked the door in and are now burning the house down.

“Taxes are rising, prices are still going up in the shops and we have been hit by recession. Nothing the chancellor says or does can undo the economic vandalism of the Conservatives over the past decade.”

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Sir Keir Starmer ‘absolutely’ wants Angela Rayner back in cabinet

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Sir Keir Starmer 'absolutely' wants Angela Rayner back in cabinet

Sir Keir Starmer has said he “absolutely” wants Angela Rayner back in his cabinet after she resigned for failing to pay the correct amount of stamp duty.

Speaking from the G20 Summit in South Africa, the prime minister told broadcasters his former deputy is “the best example ever” of social mobility and he is still in touch with her.

Asked if she could make a comeback this side of a general election, Sir Keir said: “I’ve always said I want Angela back. Even back in September at the time I said she is going to be a big voice in the Labour movement.

“Do I want Angela back at some stage? Yes absolutely.

“I think she is the best example ever in the United Kingdom of social mobility – going from a pretty challenging childhood to being deputy prime minister of the United Kingdom. She is the story of social mobility above all other stories.”

Asked if he missed having her around, Sir Keir said: “I’m friends with Angie and I like Angie a lot and we talk a lot. We still do.

“It’s always good to have Angela.”

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Ms Rayner’s meteoric rise to the top of Labour came after she left school aged 16, pregnant and with no qualifications.

She was elected deputy Labour leader by the membership in 2020, and was made deputy prime minister then housing secretary by Sir Keir.

She resigned from all of those positions in September, after it emerged she had not paid the higher rate of stamp duty on a second home she bought in Hove, East Sussex, saving her about £40k.

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Rayner admits she didn’t pay enough tax

It followed a tearful interview with Sky’s political editor Beth Rigby about the “complex living arrangement” regarding her first home, which was sold to a trust following her divorce to provide stability for her teenage son, who has lifelong disabilities and is the sole beneficiary of the trust.

An investigation by the prime minister ethic’s watchdog found she breached the ministerial code by failing to get correct tax advice, but that she acted “with integrity”.

Ms Rayner is still a backbench MP and recently did not rule out a return to the front bench herself – telling the Daily Mirror during a visit to a care centre in her constituency that she had “not gone away”.

Other cabinet ministers have also supported her return.

During the Labour Party Conference a few weeks after she resigned, Health Secretary Wes Streeting paid tribute to her work on the Employment Rights Bill and said Labour “wants her back and needs her back”.

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Rachel Reeves vows to ‘grip the cost of living’ – despite expectation of tax rises in budget

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Rachel Reeves vows to 'grip the cost of living' - despite expectation of tax rises in budget

Chancellor Rachel Reeves has promised to “grip the cost of living” in the budget next week.

Writing in The Mirror newspaper, she acknowledged that high prices “hit ordinary families most” and that the economy “feels stuck” for too many.

But at the same time, she is expected to raise taxes when she sets out economic policies on 26 November as she seeks to bridge a multibillion-pound gap in her spending plans.

“Delivering on our promise to make people better off is not possible if we don’t get a grip on inflation,” Ms Reeves wrote in The Sunday Times.

“It is a fundamental precursor to economic growth. It is essential to make families better off and for businesses to thrive.

“There is an urgent need to ease the pressure on households now. It will require direct action by this government to get inflation under control.”

She said reforms would change the welfare system from “trapping millions of people on benefits” to one “designed to help people succeed”.

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Will PM keep his word on taxes?

It comes as the government announced that rail fares will be frozen for the first time in 30 years.

The fare freeze applies to England and services run by English train operators.

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Budget jargon explained

And it will save commuters on more expensive routes more than £300 a year.

Read more:
PM refuses to rule out manifesto-breaking tax rises
Will government lower energy bills in the budget?

Among the rumoured measures in the budget is an extension of the freeze on income tax thresholds, which would see more people dragged into paying tax for the first time or shifted into a higher rate as their wages go up.

However, Conservative leader Kemi Badenoch said Ms Reeves should “have the balls” to admit that such a move would breach Labour’s manifesto promise not to raise taxes on working people.

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Ex-Reform leader in Wales who took pro-Russia bribes ‘can’t besmirch everyone else’, says party’s head of policy Zia Yusuf

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Ex-Reform leader in Wales who took pro-Russia bribes 'can't besmirch everyone else', says party's head of policy Zia Yusuf

Nathan Gill’s actions were “treasonous” but people should not “besmirch everyone else at Reform”, the party’s head of policy Zia Yusuf has said.

Gill, the former leader of Reform UK in Wales, was jailed for 10 and a half years last week after he admitted accepting tens of thousands of pounds in cash to make pro-Russian statements to the media and European Parliament.

Asked by Sky News’s Sunday Morning with Trevor Phillips if the case showed the party was soft on President Vladimir Putin, Mr Yusuf said that would be an “incredibly unreasonable position to take”.

He said: “Nathan Gill, what he did was treasonous, it was horrific, it was awful. He’s been dealt with by the authorities and he deserves the sentence that he got.”

He added: “As far as we’re concerned he is ancient history. I’ve never met him, I had never heard about him until I saw he was in the newspapers. It is unreasonable to besmirch Reform and the millions of people around the country who support Nigel and support our party.”

Gill, 52, was announced as the leader of Reform UK in Wales in March 2021, but quit the party a few months later after he failed to be elected to the Senedd.

He previously led the Welsh wing of UKIP (UK Independence Party) between 2014 and 2016, then ran by Nigel Farage, and was a member of the Senedd between 2016 and 2017, as well as an MEP between 2014 and 2020.

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Gill left UKIP in 2019 to join Mr Farage’s new Brexit Party – later rebranded as Reform UK.

Former leader of Reform UK in Wales, Nathan Gill. Pic: PA
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Former leader of Reform UK in Wales, Nathan Gill. Pic: PA

Following an investigation by counter-terrorism police, officers said they believe Gill likely took a minimum of £40,000 in cash.

Prime Minister Sir Keir Starmer demanded an investigation into links between Reform UK and Russia following the case.

Mr Farage’s position on Russia has come under scrutiny in the past. He faced a backlash during the general election campaign when he spoke about the incursion of NATO and how “we provoked this war” in Ukraine.

Read more:
Starmer demands investigation into Reform-Russia links

Speaking to Trevor Phillips, Mr Yusuf insisted his boss has never supported or been sympathetic to Russia’s decision to invade Ukraine, saying it is “not Nigel’s position that ‘we provoked the war’.”

He said: “When he [Farage] was pressed as to how he would respond if he was prime minister and Russian jets encroached into NATO airspace, his view was that those planes should be shot down. We are crystal clear about our position.

“I would also say this: the notion that Vladimir Putin, the murderous dictator, is making decisions based on what Nigel Farage is saying here in England, I think is for the birds.

“We are now in a situation where Ukraine’s sovereignty has been violated, and Vladimir Putin needs to be brought to heel.”

But Labour accused Reform of “pandering to Moscow” following the interview.

Anna Turley, chair of the Labour Party, said Mr Farage has previously called Mr Putin “the leader he most admired and has repeatedly parroted Kremlin talking points”.

She added: “Reform must urgently allow an independent investigation to root out pro-Russia links, to assure the public that Putin holds no sway over their party or its representatives.”

Read more from Sky News:
Reeves vows to ‘grip the cost of living’
PM ‘playing whack-a-mole’ to keep US on side

Police have confirmed Mr Farage has not been part of the investigation into Gill.

Mr Farage said on Friday: “An investigation into Russian and Chinese influence over British politics would be welcome.”

The Reform UK MP for Clacton had previously described his former colleague as a “bad apple” and said he was “shocked” after Gill pleaded guilty to bribery.

He said: “Any political party can find in their midst all sorts of terrible people.

“You can never, ever guarantee 100% that everyone you meet in your life, you shake hands with in the pub, is a good person.”

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