The UK government’s latest budget, unveiled by Chancellor Jeremy Healey, introduces a series of tax increases targeting landlords, savers, banks, and the betting industry, generating mixed reactions from various sectors.
The betting industry has voiced significant concerns following the announcement of higher taxes on gambling operators. Major firms including Paddy Power, Sky Bet, and Betfair have announced plans to cut up to 1,400 jobs across the UK and Ireland, attributing these layoffs to the increased tax burden introduced in November. Entain, owner of Ladbrokes and Coral, disclosed that the latest tax hike will cost its UK and Ireland retail operations around £25 million annually. Chief Executive Stella David described the changes as “another disappointing decision by the Government,” warning that the pressure on licensed bookmakers could drive more customers towards illegal gambling websites. The horse racing industry may also feel the impact if betting shop closures lead to reduced funding for the sport.
Banks face a temporary doubling of the Bank Corporation Tax Surcharge from 3% to 6%, effective for 15 months starting January. Chancellor Healey justified the increase by noting that banks, which benefited from government support during the financial crisis two decades ago, are now expected to contribute to funding £100 energy payments for 20 million households. However, critics caution that banks might offset these costs by offering less attractive savings rates or increasing lending charges. Conservative Party leader Kemi Badenoch criticized the move, suggesting it risks repeating past mistakes of overtaxing key industries, potentially resulting in reduced tax revenues if firms relocate.
Landlords are also targeted with a two-percentage-point rise in income tax rates on rental profits, effective from next April. This adjustment raises the basic income tax rate on property income to 24%, with higher-rate and additional-rate taxpayers facing 44% and 49%, respectively. The Office for Budget Responsibility warned that landlords could pass these costs onto tenants through rent increases.
Savers will see a similar two-percentage-point hike in the tax on savings interest, affecting individuals whose earnings exceed available tax-free savings allowances. Chancellor Healey noted that 88% of savers would be unaffected by this change and reversed previous proposals to reduce the annual cash ISA allowance, which remains at £20,000.
Business owners may also face higher taxes when selling their enterprises, as the lifetime threshold for Business Asset Disposal Relief has been cut from £1 million to £500,000. Healey maintained that 75% of those claiming the relief would not be affected by this adjustment.
Additionally, local mayors will gain authority from 2028 to impose tourist taxes on overnight stays, a move hospitality sector leaders warn could add approximately £100 to the cost of a family two-week holiday in the UK. The cumulative effect of these measures signals a more aggressive fiscal stance from the government aimed at raising revenue amid economic pressures, though it has sparked debate over the potential economic repercussions.