Labour’s first Budget for 14 years will be delivered by Chancellor Rachel Reeves on Wednesday 30 October. She has warned that it will involve “difficult decisions”.

Government sources have told the BBC the Budget could include tax rises and spending cuts to the value of £40bn.

Each year, the chancellor – who is in charge of the government’s finances – makes a Budget statement to MPs in the House of Commons.

It outlines the government’s plans for raising or lowering taxes. It also includes big decisions about spending on things like health, schools, police and other public services.

The previous Conservative Chancellor, Jeremy Hunt, delivered the last Budget in March, before the general election.

After a change of government, the new chancellor holds another Budget to set out their priorities.

The 2024 autumn Budget is on Wednesday, 30 October.

The Budget speech usually starts at about 12:30 UK time and lasts around an hour. It will be broadcast live on the BBC iPlayer and on the BBC News website.

The current leader of the opposition, Conservative Party leader Rishi Sunak, will give a speech responding to the Budget as soon as Reeves sits down.

Labour has repeatedly said that it needs to make difficult financial decisions.

When Labour took power in July, Reeves said it had “inherited the worst set of circumstances since the Second World War” regarding government finances – something the Conservatives deny.

Reeves said she was facing a £22bn “black hole”. This gap was due to rules the government chose to follow over how much money it can borrow over the next five years.

However, the chancellor told the BBC she is changing the debt rules, to allow it to fund new big projects.

It is expected to permit up to £50bn more borrowing to invest in big building projects such as roads, railways or hospitals. Not all of this is expected to be allocated at the Budget.

The government has said that boosting the UK economy is its priority.

Following a brief recession at the end of 2023, the UK recorded the fastest growth in the G7 group of the world’s richest nations during the first six months of 2024.

However, the Office for National Statistics has since warned the UK’s outlook was one of weaker economic growth.

At the election, Labour promised not to increase taxes on “working people”. It said it would not raise VAT (value added tax), income tax or National Insurance (NI).

But there has been lots of speculation about what the Budget could contain:

National Insurance contributions by employers

The prime minister and chancellor have refused to rule out an increase in employer NI payments. Reeves said Labour’s election pledge related to employee payments.

Employers currently pay NI on their workers’ earnings at a rate of 13.8%.

At the moment companies do not pay NI on pension contributions they make for staff, but reports have suggested this could change.

Businesses have argued that raising NI for employers will make it harder to hire staff and create jobs.

Income tax and NI thresholds

These are the income levels at which people start paying NI or income tax, or have to pay higher rates.

These used to rise every year in line with inflation, but were frozen by the previous Conservative government in 2022.

These were due to start rising again each year from 2028, but the chancellor is now thought to be considering extending the freeze for the remainder of the parliament.

Freezing the thresholds means that more people start paying tax and NI as their wages increase, and more people pay higher rates.

Inheritance Tax

This tax, which is currently 40%, is usually paid on the value of a deceased person’s assets above a threshold of £325,000.

It is thought changes to a number of exemptions which affect how much inheritance tax people have to pay are being considered.

Capital gains tax (CGT)

This tax is charged on the profit made from the sale of assets that have increased in value, such as second homes or investments.

It is paid by individuals and some business owners. For higher earners, the levy is currently 24% on gains from selling additional property, or 20% on profits from other assets like shares.

There has been speculation that these rates could be increased but the prime minister appeared to dismiss suggestions of a rise to as much as 39%.

Pension taxation

There are various ways the chancellor could raise more money by changing the way private pensions are taxed.

That could include reducing the cap on tax-free lump sums from pension pots, cutting the tax break for employers putting money into employees’ pensions, or changing the system of tax relief on pension contributions.

At the moment, basic rate taxpayers get tax relief at 20% and higher rate taxpayers at 40% or 45%.

The government could introduce a single flat rate of relief which would make the system less generous for higher earners, although reports have suggested this is now unlikely.

Stamp duty

Stamp Duty Land Tax is paid if you buy property or land over a certain price in England and Northern Ireland.

In 2022, the rate at which people start to pay was increased from £125,000 to £250,000. For first-time buyers it rose from £300,000 to £450,000.

However, the higher thresholds are only due to last until March 2025 after which they will return to the original levels. Labour has not committed to an extension.

Non-dom tax status

The term “non-dom” describes a UK resident whose permanent home – or domicile – for tax purposes is outside the UK. As a result, they do not pay UK tax on money they make elsewhere.

In the March Budget, the then-Chancellor Jeremy Hunt said non-dom tax status would be abolished, although there were some concessions.

Labour has said it wants to toughen the existing plans, although these plans might be reconsidered amid worries they could bring in less money than expected.

Fuel duty

Fuel duty has not risen in more than a decade. It was frozen between 2012 and 2022, and cut by 5p in March 2022 when pump prices surged following Russia’s invasion of Ukraine.

However, some motoring groups argue the cut was never passed on to motorists and the RAC says it could be reversed

Winter fuel payments

The government has said future payments will only be made to those getting pension credit or other means-tested help.

The plans have been criticised by some MPs, unions and charities.

State pension

The state pension is set to rise by 4% in April 2025.

The increase will be confirmed around the time of the Budget.

VAT on private schools

The government has said VAT will be added to private school fees from 1 January.

Some private schools will lose business rates relief.

Energy windfall tax

The government is increasing the windfall tax on the profits oil and gas firms make in the UK.

The energy profits levy is due to rise to 38% from 35% on 1 November, and will remain in place until 31 March 2030.

The Treasury, the government department in charge of the economy and public spending, publishes a report alongside the Budget speech. It gives more details about the measures announced and what they will cost.

The independent Office for Budget Responsibility (OBR), which monitors government spending, also produces an independent assessment of the health of the UK economy.

MPs will spend several days debating the plans.

They are then asked to approve the proposals and the government introduces a Finance Bill to turn the Budget announcements into law.