- Finance and National Insurance Contributions Bills published
today to deliver key Budget 2025 measures
- Tax changes enshrine fair and necessary tax reforms to fund
cutting the cost of living, cutting NHS waiting lists, and
cutting debt and borrowing
- Measures include maintaining income tax thresholds, fairer
tax rates on savings, dividend and property income, and changes
to salary sacrifice
Crucial tax measures to deliver on the government's priorities of
cutting the cost of living, NHS waiting lists and borrowing have
begun their passage into law.
Today's Finance Bill and National Insurance Contributions (NICs)
Bill will cement the Budget's fair and necessary choices that
fund the Budget's priorities: cuttings the cost of living,
waiting lists and borrowing.
Legislation for key measures, including maintaining income tax
thresholds and reforming salary sacrifice, will help deliver
these claims.
This includes taking £150 off typical energy bills next year,
increasing the National Living Wage by £900, and protecting the
triple lock that means pensioners get an extra £575 a year on the
full new State Pension.
Exchequer Secretary to the Treasury, ,
said:
“The choices in this Budget are fair, necessary reforms that cut
the cost of living, cut waiting lists and cut borrowing, avoiding
both a return to austerity and a reckless borrowing spree.”
At the Budget last week, the Chancellor asked everyone to
contribute by maintaining income tax and equivalent NICs
thresholds towards the end of Parliament.
Those with the broadest shoulders will pay more through long
overdue reforms, including new income tax rates on property,
savings and dividends to ensure income from assets is taxed more
fairly.
Other key measures included in the Finance Bill:
- Supporting scale-ups to grow by increasing the investment
limits for Venture Capital Trusts and Enterprise Investment
Schemes while increasing the Enterprise Management Incentives
company eligibility limits for scaling companies.
- Increasing taxes on online gambling while protecting bingo
halls, by abolishing Bingo Duty. and horseracing.
- Modernising the tax system and ensuring less taxpayer
money is spent on debt interest and more on schools and
hospitals.
- Tackling tax non-compliance in the umbrella company market
and requiring tax advisers to register with HMRC to meet minimum
standards.
The NICs Bill was also introduced in Parliament published today.
This delivers reforms to salary sacrifice to introduce a cap on
NICs relief to the first £2,000 of pension contributions from
April 2029.
The cost of relief was set to almost treble from £2.8bn in
20216-17 to £8bn by the end of the decade and has
disproportionately benefitted higher earners. This reform will
protect low and middle earners while retaining pension tax relief
worth over £70bn a year.
Together, this legislation underpins the government's plan to fix
a broken welfare system and renew public services.
Budget 2025 also means helping lift hundreds of thousands of
children out of poverty, investing in getting more people into
work, and maintaining the highest level of public investment for
40 years.
At the same time, the government will keep borrowing this year to
its lowest level in six years as a share of GDP and double
headroom against our fiscal rules.
Notes to editors
- For a full list of measures included in today's Finance Bill
2025-26, please see here.
- For a full list of measures included in today's National
Insurance Contributions Bill 2025-26, please see here.
- Legislation to maintain equivalent NICs thresholds will be
legislated for in early 2028 via the annual setting of NICs
rates, limits and thresholds as standard.
Finance (No.2)
Bill
Copy of Bill
Explanatory Notes
National Insurance
Contributions Employer Pensions Contributions) Bill
A Bill to Make provision to amend section 4 of the Social
Security Contributions and Benefits Act 1992, and section 4 of
the Social Security Contributions and Benefits (Northern Ireland)
Act 1992, so that amounts of salary sacrificed for employer
pensions contributions pursuant to optional remuneration
arrangements are liable to national insurance contributions.
Copy of Bill
Explanatory Notes
