Chancellor Rachel Reeves has reversed a plan to increase income tax rates in the upcoming Budget. Officials reported the proposal was withdrawn following concerns it would provoke significant opposition from lawmakers and the public.
Instead of a broad income tax hike, the Treasury is now expected to pursue a variety of smaller, targeted revenue-raising measures. These could include a new gambling levy and higher taxes on valuable properties. The government also abandoned a separate plan to tax professionals using limited liability partnerships after analysis indicated it might not raise the intended revenue.
The Chancellor is still anticipated to extend a freeze on income tax thresholds, a policy that increases government revenue by pulling more earners into higher tax brackets. This decision follows intense lobbying from financial and professional services, which warned that major tax changes could harm economic confidence. The government stated its Budget aims to balance fiscal responsibility with fairness, ensuring those with the greatest financial capacity contribute appropriately.
Instead of a broad income tax hike, the Treasury is now expected to pursue a variety of smaller, targeted revenue-raising measures. These could include a new gambling levy and higher taxes on valuable properties. The government also abandoned a separate plan to tax professionals using limited liability partnerships after analysis indicated it might not raise the intended revenue.
The Chancellor is still anticipated to extend a freeze on income tax thresholds, a policy that increases government revenue by pulling more earners into higher tax brackets. This decision follows intense lobbying from financial and professional services, which warned that major tax changes could harm economic confidence. The government stated its Budget aims to balance fiscal responsibility with fairness, ensuring those with the greatest financial capacity contribute appropriately.
