Main budget announcements at a glance

Chancellor John Healey has unveiled the long-anticipated budget, the first for Prime Minister Andy Burnham.

Mr Healey called it a budget "for the working people" as he announced details in the House of Commons on Wednesday.

New energy payment

Twenty million households in England in council tax bands A to D will get a new £100 energy payment.

It will be paid directly into bank accounts, through the council tax system, from January 2027 and will be funded by higher bank taxes.

Mr Healey said the governments of Scotland, Wales, and Northern Ireland would receive their share of the £2.6bn scheme, and encouraged them to do the same.

VAT and green levies

A green levy, to fund hydrogen projects, has been taken off household energy bills and moved into general taxation, meaning bill payers may see monthly charges fall.

As announced in September, the government has cut tax on electricity bills to zero, this VAT cut has been extended until July.

Energy bills

The standing charge on gas bills is being scrapped, the chancellor announced this morning.

About 23 million homes will benefit from removing the levy, which is paid regardless of how much or little gas is actually used.

The Treasury estimates say the removal will lift £45 off an annual bill for 60% of households, as the charge is instead levied on the unit rate.

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Banking tax

Banks are to be subject to higher taxes, with the chancellor upping the banks' surcharge.

It means lenders will face a levy of 6%, up from the current 3% they pay in addition to corporation tax of 25%.

The levy will begin in January and last for 15 months.

Import tariffs on some imported food

Tariffs have been removed from more than a hundred imported food items, including gherkins, baked beans, and chocolate, which the government said could save up to £21 a year.

Business rates

The threshold at which retail, hospitality and leisure businesses pay rates, a charge on commercial properties, has been increased from £12,000 to £18,000.

It means half of our shops, restaurants and gyms pay no business rates, the chancellor said.

Devolution

The government pledged that 100% of business rates will be retained locally by the end of the decade.

From next year, 20% of revenue from business rates will go to national mayors and from 2028, a share of income tax receipts will go to mayors too.

From 2028, mayors and other authorities will have new powers to introduce a tourist tax, known as an overnight visitors levy.

Online marketplaces to collect VAT

Mr Healey said he will strengthen the requirements for online marketplaces to collect VAT from sellers on their platform.

A tax relief known as entrepreneurs' relief, officially called the business asset disposal relief, has been cut back with the lifetime limit reduced from £1m to £500,000.

It means businesspeople will pay lower tax when they sell certain business assets or shares.

A new capital gains tax relief, called founders relief, has been established.

It's a 10% rate on lifetime gains up to £10m for the founders of our most successful companies, Mr Healey said.

Wages

The minimum wage is to rise by 3.9%.

State pension

Pensioners receiving the state pension are to be shielded from paying income tax this quarter.

Cash ISA U-turn

Plans to slash the annual cash Individual Savings Account (ISA) have been scrapped. The allowance will remain at £20,000 rather than falling to £12,000 as announced by the former chancellor Rachel Reeves at the budget last year.

The Treasury will also work with the private sector to create a new starter ISA to reward first time investors.

The duty, or tax, paid on diesel and petrol has again been frozen until July with the 5 pence cut announced in 2022 remaining.

Social housing

Sales of land to social housing providers will be VAT free.

An additional £1.5bn will be provided for the government's social and affordable housing programme.

Brownfield sites

More brownfield sites will have biodiversity requirements removed, in a bid to get more council homes built.

First time buyers ISA

A first time buyers ISA will replace the lifetime ISA.

£430m to tackle rough sleeping

As announced this week, funding to end rough sleeping has doubled to support one of Andy Burnham's first promises when he became prime minister.

A £430m package aims to provide emergency accommodation and support.

Defence spending to rise

Defence spending will rise to 3% of GDP (a measure of everything produced in the economy) by 2030 and to 3.5% of GDP by 2035.

Details of how this will be done were not announced and will instead come at the spending review next year, Mr Healey said.

Carers allowance to be tapered off, rather than cut

Carers allowance will be tapered off as their earnings rise rather than simply being cut off once their income reaches £204 a week.

It means the allowance will not be cut off entirely if they earn a penny more than the threshold.

An extension of paid parental leave

Paid parental leave has been extended to self-employed fathers and their partners.

A "British data centre covenant" has been launched to set out conditions for building data centres.

(c) Sky News 2026: Main budget announcements at a glance