Rachel Reeves warned against pensions tax raid or annual wealth tax at budget
New warning as chancellor weighs up budget options
- Chancellor Rachel Reeves faces mounting pressure to address a financial black hole of at least £30bn at the upcoming Budget.
- The Institute for Fiscal Studies (IFS) has cautioned against restricting income tax relief on pension contributions or implementing an annual wealth tax, warning these would penalise savers.
- Instead, the IFS suggests the chancellor could raise tens of billions through tax reforms, including a windfall tax on existing wealth, without breaking Labour's manifesto pledges.
- The think tank also advocates for a comprehensive overhaul of the council tax system and potentially replacing stamp duty on housing and council tax with a new recurrent property tax based on updated values.
- Cabinet ministers are reportedly divided on targeting wealthier individuals, with some fearing such measures could accelerate a wealth exodus from Britain and hinder economic growth.