Rachel Reeves ‘considering 2p increase to income tax’
Rachel Reeves considers income tax hike
- Chancellor Rachel Reeves is reportedly considering increasing income tax by 2p while simultaneously cutting National Insurance by 2p in the upcoming Budget.
- The Treasury is exploring these potential tax changes as Ms Reeves aims to balance the books and adhere to her fiscal rules.
- There is pressure on the Chancellor to potentially break manifesto pledges, with discussions in Whitehall including changes to the 45p top rate of income tax.
- Sir Keir Starmer recently declined to reaffirm Labour's manifesto commitment not to raise VAT, income tax, or National Insurance, stating that Budget plans would not be revealed in advance.
- The Institute for Fiscal Studies warned that Ms Reeves may need to find £22bn through tax rises or spending cuts to meet debt targets, due to factors like higher borrowing costs and inflation.