UK Budget Sets £26.1 Billion Annual Tax Rises as OBR Lifts Fiscal Headroom

The plan seeks to fund services without higher borrowing by lifting the fiscal buffer to nearly £22 billion.

Overview

The OBR projects the measures will raise £26.1 billion a year through 2029–30 and expand five‑year fiscal headroom to nearly £22 billion, improving compliance with budget rules.
Official forecasts cut UK GDP growth to 1.4% in 2026 and about 1.5% in subsequent years through 2030.
Revenue steps include a longer freeze on income‑tax thresholds (about £7.6 billion in 2029/30), a levy on homes over £2 million from 2028, an electric‑vehicle tax from 2028, and a 40% online gambling duty.
Taxes will rise for workers, pension savers and investors, with the OBR expecting the overall tax burden to approach 38% of GDP by 2030, the highest since World War II.
Reeves said the higher take enables public service expansion without extra debt and blamed weaker growth on a Conservative legacy of austerity and Brexit, while gilt yields fell after the announcement.