Rachel Reeves confirms tax increases in October budget

Chancellor Rachel Reeves has announced that the upcoming October 30th budget will include tax increases, while ruling out hikes to income tax, national insurance, and VAT, as reported by The Times.

Reeves, speaking on The News Agents podcast, stated the necessity of raising taxes, citing a need to address public finance gaps. A close source indicated that the planned tax increases align with those specified in the Labour manifesto.

When questioned about potential changes to inheritance tax, capital gains tax, or pension reforms, Reeves deferred details until the budget is released. She underscored the commitment to Labour’s manifesto and the use of accurate forecasts from the Office for Budget Responsibility in the budgeting process.

Reeves also called for an apology from former Chancellor Jeremy Hunt, accusing him of misleading the public regarding the state of public finances. She criticised the former government for mismanaging the economy, stating that Hunt should take responsibility and apologise for his actions.

The debate over the true cost of the pay deal highlighted discrepancies in public sector financial management. Senior research economist Ben Zaranko emphasised the importance of considering the full, permanent increase in the pay bill, which he suggested could lead to higher future pay awards for other NHS staff.

Reeves accused the former government of concealing a £22 billion financial shortfall, largely attributed to her decision to raise public sector pay by about 5%. She criticised the previous administration for excluding affordability numbers in the remit given to independent pay review bodies.

Jeremy Hunt defended his tenure, accusing Reeves of employing deceitful tactics and discrediting politics. He maintained that the previous government left a strong economic legacy despite challenges.

3 responses

  1. Anyone who thought that Inheritance Tax and Capital Gains Tax weren’t under threat pre-election were kidding themselves. The Treasury has been pressing the Government for some time now for reforms on IHT and CGT, so you can imagine they will be pushing against an open door now!

    My key predictions are for IHT to abolish the Residence Nil Rate Band and to abolish gifts out of income, to be replaced with an increased annual gift allowance.

    My key predictions for CGT are the alignment of rates with Income Tax – 20, 40, and 45% in England – and the reintroduction of CGT on death (Labour introduced CGT in 1965 and there was a charge on death then).

Read more stories

Join over 6,000 wills and probate practitioners – Check back daily for all the latest news, views, insights and best practice and sign up to our e-newsletter to receive our weekly round up every Friday morning. 

You’ll receive the latest updates, analysis, and best practice straight to your inbox.

Features