My Milkshake Tax brings pounds to the yard...

(To be rapped to the tune of Kelis’ "Milkshake")

The Milkshake Tax brings pounds to the yard
And my Mansion Tax is better than yours
Damn right, it’s better than yours.
Got a fancy pad? Then I’ll have to charge

My freezes hurt everyone in the yard,
And they’re like – thresholds are hard!
Damn right, I’m filling my card
There’s the Tories’ Black Hole I’m trying to halve!

(full song here for those who want their money commentary in rap form).

Jesus, Mary and Joseph, what a week. For those of you living under a rock (currently exempt from the Rock Tax but don’t hold your breath), the only tax-free things left in Britain are procreation and bingo. Which, looking on the bright side, sounds like a good weekend to me, but first, let’s digest more of the financial news.

Yes, Rachel Reeves delivered her second Budget, and she taxed hard (tomorrow), and she spent hard (today). Not even milkshakes evaded her sights. For those who want the precise facts and figures, our full Budget review has the detail. You can also register to join me live or on catch-up as I go through what the Budget means for our money with wealth managers RBC in a webinar this coming Monday lunchtime.

Frozen tax thresholds till 2031 – The silent assassin

This, my friends, was the hidden ninja in the Chancellor’s red suitcase. Deadly. Imagine the amount of food an 8 year-old boy eats every week. Then imagine keeping the quantity the same for 6 years. That 14 year-old would be ravenous. This is what’s happening to our money - almost everyone with a job will be worse off.

Pensioners getting the full State Pension (£12,547 from next April) will be very close to tipping over the tax-free Personal Allowance into the basic-rate tax band (although it’s just been confirmed, there will be a tax exemption for the duration of this Parliament for pensioners for whom the State Pension is their sole income).

Anyone on around £40,000 will probably end up in the higher-rate band of £50,270+ by 2031. And people earning £90,000 have got a particular thing to look forward to – the tax quirk which sees those earning over £100,000 paying an effective rate of 60% for a bit (as you progressively lose all of your tax-free Personal Allowance and maybe some childcare to boot).

Look around you next time you are on a train, at the supermarket, or in the pub. 1 in 4 of those people around you will be higher-rate taxpayers by 2030. Unless, of course, you live in Knightsbridge, but you get the point. 1 in 4.

Salary sacrifice will be knee-capped to a maximum of £2,000

Salary sacrifice is a good way to encourage people to save for retirement. Imagine you earn £52,000. If you salary sacrifice £7,000, for example, this gets put into a pension by your employer, and you then pay tax and National Insurance on £45,000. You remain a basic-rate taxpayer. Your employer pays their 15% National Insurance on the £45,000 number. Your pension grows along with your self-reliance in later life. Happy days.

This amount will be capped at £2,000 each year, but only from 2029, so you do have lots of time to consider alternative plans. We’re walking into an absolute crisis of older people with inadequate savings, as Gen Xers didn’t have final salary schemes, and we missed out on auto-enrolment in our clubbing years. Feels odd to penalise those who are saving.

Rental, savings and dividend income tax to increase

It just keeps getting bleaker for landlords. Tax on rental income will be going up by 2% from April 2027. Which means some will throw in the towel and look to sell up. And others will look to pass this on, ask for more rent, and so add pressure to renters across the board.

Company owners paying themselves by dividends? Ouch. Tax here will also go up by 2% from April 2026. This will also hurt older investors who use income funds outside the tax-sheltered ISA to generate an income. Tip – learn to love ISAs for investments which pay dividends!

And tax on savings interest will also go up. Savers keeping a lot in cash? Keep an eye on those tax-free allowances because you will pay more tax on anything above this from April 2027 (basic-rate taxpayers get the first £1,000 of interest tax-free every year, £500 for higher-rate taxpayers).

Hmm, OK, I’ll use a Cash ISA to shield myself. Not so fast, Meester Bond. Your maximum annual contribution into a Cash ISA will fall to £12,000 a year from April 2027. But only if you’re under 65. Keep up at the back!

Oh God, brainfry, anyway let’s tax people who go beagling and have Gaggenau kitchens – the Mansion Tax!

I know it sounds kinda fun to inflict pain on people who are photographed in Hello! Magazine, but all this to raise £400 million… After the hoopla, to revalue all homes in the F, G, and H Council Tax bands?

How might we more usefully think about how richer people with business experience might help the UK to become more productive and offer more opportunities? This week, we heard that Laksmi Mittal, apparently Britain’s 7th richest person, will be leaving the UK. I am gutted. I would throw myself at his feet and beg him to take us back. Don’t leave us for the other woman that is Dubai, please! We’ll change! Put out the bins. Laugh at your jokes. Watch golf on the telly! Anything…

I did a little snooping. His Kensington home – nicknamed "Taj Mittal" – cost £57 million years ago and has a ballroom, a jewel-decorated pool, Turkish baths, and a 20-car garage. How many Turkish baths do you need? And does he actually ever drive? Could I live in his garage?

Play the fun game for one second of being the richest man in the UK and imagine how much you spend in one week on cleaners, drivers, interior designers, nannies, cooks, yoga teachers, microdosing, peacock wranglers... oh, I don’t know what they get up to! I suspect he spends more in one day than the Mansion Tax would collect in one year. WE. WANT. HIM. HERE!

If I were the Chancellor, I would ask him to tea and work out a way he could contribute to the UK, which I’m sure he would like to do. Make him feel good. Name something after him. Strike a deal. And give him some certainty in return. And do not worry about £7,500 in a tax which would require Derek in planning to inspect the silly jewel-decorated pool!

Business owners

And finally, I turn to small business owners. Pubs. Beauticians. Cafes. Warehouses. Care homes. The minimum wage increase is only positive for the country if people keep their jobs. £12.71 per hour is not a lot to earn with the cost of living as it is. But for employers trying to balance the books after last year’s NI increase, it’s yet another thing to juggle.

But every cloud…

I will end with measures universally seen as positive before you all rush to self-medicate with an enormous gin (alcohol duty will rise by 3.66%, oops, back to positives!). Bus and regulated train fares were frozen for a year as were prescriptions. Average energy bills should come down by about £150 a year from next April. Tax on horse betting was not increased. And the bingo levy was abolished. You see! It’s all OK, really.

As you head into the weekend, we’re asking readers to share your thoughts on the Budget. What did you make of it? We’ll summarise your views next week and answer your questions as we move from what was said, to what you can do to make the most of your money. And remember the webinar on Monday if you want to hear this live and in person from yours truly.

Ooof. Over and out everyone.

Holly