Autumn budget live: Rachel Reeves says taxes will rise by £40bn as she delivers budget

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Reeves announces a new tax on vapes.

Reeves says stricter rules on inheritance tax will raise more than £2bn

Reeves is now on inheritance tax. She says she is taking “a balanced approach”.

First, the previous government froze inheritance tax thresholds until 2028. I will extend that freeze for a further two years until 2030 that means the first £325,000 of any estate can be inherited tax free, rising to £500,000 pounds if the estate includes a residence passed to direct descendants and £1m when a tax free allowance is passed to a surviving spouse or civil partner.

Second, we will close the loophole created by the previous government made even bigger when the lifetime allowance was abolished by bringing inherited pensions into inheritance tax from April 2027.

Finally, we will reform agricultural property relief and business property relief from April 2026. The first £1m of combined business and agricultural assets will continue to attract no inheritance tax at all. But for assets, but for assets over £1m inheritance tax will apply with a 50% relief at an effective rate of 20%,

This will ensure that we continue to protect small family farms with three-quarters of claims unaffected by these changes.

I can also announce that we will apply a 50% relief in all circumstances on inheritance tax for shares on the alternative investment market, and other similar markets, setting the effective rate of tax at 20%.

Reeves says these changes will raise over £2bn by the end of the forecast period.

Reeves confirms capital gains tax going up

Reeves turns to capital gains tax.

The lower rate will rise from 10% to 18%, and the higher rate will go up from 20% to 24%, she says.

She says this will still be the lowest rate for any European G7 country.

UK companies will be disappointed, although not surprised, by Rachel Reeves’s decision to increase the rate on employer national insurance.

Damon Hopkins, Head of DC Workplace Savings at financial services consultancy Broadstone, says it will have immediate consequences for businesses.

“An increase in the rate of employer Insurance and lowering the threshold for when businesses start paying the tax will add to the financial pressures that businesses are already experiencing.

The revenue raising measure is likely to have immediate knock-on consequences whether that is pausing hiring, scaling back or scrapping pay increases and/or reviewing existing employee benefit arrangements.”

And while Reeves says it will bring in £25bn, it will probably have a knock-on impact on other tax revenues.

Firms could absorb it through smaller pay rises for staff (meaning lower income tax receipts in future years), or lower profits (meaning a smaller corporation tax bill)

Reeves says employers' national insurance going up to 15%, and threshold falling, raising £25bn a year

Reeves says she is not increasing income tax, employees’ national insurance and VAT.

But she will increase employers’ national insurance, she says. It will go up by 1.2 percentage points, to 15%, from April next year, she says.

And she says she is reducing the threshold at which it gets paid. This will come down from £9,100 per year to £5,000.

Reeves says this will raise £25bn a year by the end of the forecast period.

This will raise £25bn per year by the end of the forecast period.

And Reeves says she has decide to continue the freeze in fuel duty. This will cost almost £3bn, she says.

Reeves says the state pension will rise by up to £470.

Reeves says the government is hiring more people to raise tax revenues.

And Reeves turns to carers’ allowance.

She says the government is increasing the amount people can earn before they lose the benefit. It will rise to the equivalent of more than £10,000 a year, she says. She says this is “the largest increase in carers’ allowance since it was introduced in 1976”.

She says the government is also reviewing what is happening to overpayments.

Reeves confirms the 6.7% increase in the national minimum wage announced yesterday.

Reeves says crackdown on welfare fraud will save £4.3bn

Reeves says the government will find savings by reforms to the health and disability benefits system.

And there will be “a crackdown on fraud in our welfare system, often the work of criminal gangs”, using “innovative new methods to prevent illegal activity and provide new legal powers to crack down on fraudsters, including direct access to bank accounts to recover debt”.

She says this should save £4.3bn by the end of the forecast period.

There are also measures to get more people into work, she says.