Budget 2024 latest: Huge boost for Reeves as IMF growth forecast rises after inflation battle ‘largely won’

Capital Gains Tax (CGT) is paid on the profit made when an asset which has increased in value is sold. It is applied to things like the sale of personal possessions worth more than £6,000 (apart from a car), property that’s not the seller’s main home, shares and business assets.

It is charged at 10 or 18 percent for basic rate taxpayers, and 20 or 24 for higher or additional rate earners. There is a tax-free allowance of £3,000.

There are several ways CGT could be changed. In the run-up to the election, the Lib Dems and Greens both said they would rethink the tax bands to be more similar to income tax, raising an estimated £5.2bn a year.

Speculation has mounted in the subsequent months, with an increase in employer NICs now looking likely. The measure has caused strong political debate, focused on whether it would break Labour’s manifesto pledge to not raise taxes on “working people.”

Ministers and Treasury officials have indicated the government’s position is that the measure would not break their manifesto pledge. Labour has not confirmed that an employer NIC hike will be included in the Budget, but has refused to rule the measure out.

Meanwhile, Institute for Fiscal Studies director Paul Johnson has argued it would be a “straightforward breach.”

The tax expert adds that in the extreme case that an increase of one pence per pound in employer NICs was passed on to employees in the form of lower wages, the measure would only net £4.5 billion a year. He adds that the end figure would probably be a little higher than this, but much less than a previous HMRC estimate of £8.5 billion.

Martin Lewis has issued a warning over a new crackdown on buy now, pay later products.

The money expert has cautioned consumers it is a case of buy now, get protected later.

Ministers have announced that millions of shoppers are to be protected by new rules for BNPL, as they are known.

Mr Lewis welcomed the change saying: "Buy Now, Pay Later is now ubiquitous at online checkouts, so the fact it’s never been regulated is a travesty I and others have long campaigned on.

“The last chancellor promised to regulate, then the tumbleweed rolled as he went silent, so I am delighted the new government has quickly restarted the process.”

Rachel Reeves should increase capital gains tax (CGT) at Labour’s upcoming Budget, a group of millionaire business owners have urged, estimating the measure would raise £14bn a year.

In a report by the IPPR think-tank, analysts have consulted with wealthy entrepreneurs who say higher CGT would not have stopped them from making investments in the UK.

The group has called for CGT to be aligned with income tax, arguing that fears such a move would lead wealthy individuals to leave the country in response are unfounded. Recent HMRC analysis found that a 10 per cent increase to the measure would actually cost the exchequer £2bn after behavioural impacts.