The UK government won’t admit it, but tax rises are coming
On April 18, 2017, people walk near the Parliament Houses in Westminster in the center of London, near the Elizabeth Tower, usually called Big Ben.
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The British government hates to accept it, but economists say that the Treasury is likely to increase taxes in autumn if it will make a black hole in the public financing it creates effectively.
The National Institute of Economic and Social Research (NIESR) is the latest economic thinking tank that warns that taxes should rise this year if the British Chancellor Rachel Reeves imposes self -imposes.
These rules are both balanced and aimed at the end of the decade by the end of the decade-with “stability rule” and a part of GDP (2029-30), “Investment rule”, “Investment Rule”, which requires the finance of daily expenditures with tax revenues.
In an economic view published on Wednesday, Niesr, “Our guess is not on the way to meet the ‘stability rule’ by proposing an open angle of £ 41.2 billion in 2029-30.” He said.
“If the chancellor will remain in accordance with financial rules, significant adjustments will need to be made in the autumn budget.”
In the last expenditure examination, the government fixed its spending plans for the next few years, “the only arm is to raise taxation moderately but constantly.”
‘Trilemma’, Reeves’ own financial rules, tax and expenditure commitments and the labor of the Labor Party’s manifesto “working people” does not increase the taxes on the promise of the Bind.
“Simply put the chancellor at the same time, the chancellor cannot fulfill his financial rules, he cannot fulfill his spending commitments, and he promises to avoid tax increases for working manifestos.
On June 23, 2025, British Prime Minister Keir Starmer and Exchequer Rachel Reeves’ chancellor.
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Reeves, if the Treasury wants to keep a “title of £ 9.9 billion”, which is gradually vaccinated by welfare reforms for the laborers and the winter fuel payment deductions for the laborers, it should be noted that Niesr’s budget deficit prediction may be even higher than £ 51.1 billion.
“In order for the chancellor to really slide the dial and to create a reasonable buffer against financial rules, it will have to look at either VAT raising or raising income taxes.
No good options for tax increases
British Prime Minister Keir Starmer was asked for a NIESR report on Wednesday, and the proposal that tax increases would be necessary, but did not “recognize the figures.” However, in the autumn, the VAT refused to exclude VAT, Income Tax and Corporate Tax. Sky News reported.
“Some of the figures removed are not the numbers I know, but the budget will not be until the later hours of the year, and therefore we will guess and determine our plans,” he said.
Niesr said the chancellor Reeves will announce the “inevitable decisions” for the autumn budget and the taxation and spending plans for the next year.
“Unfortunately, politically accepted for tax increases will either get very little income or have great distortion effects or both.” He said.
The think tank said other measures, such as reducing the existing tax -exempts of tax -exempts or increasing the capital earning tax rate, the current 20,000 pounds, such as the existing tax, said.
The government can also revers the employees’ national insurance contributions (NICS) deductions, but “This will make a significant income during the parliament period,” Again, the working people violate the promise of not increasing taxes on people and “will encourage creation and possibly increase unemployment.”
On December 16, 2023, a general view of people visiting the trafalgar Taverna pub decorated with cherry birds and rope lights on the banks of the Thames River in Greenwich in London, London.
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When Reeves announced the budget of the government last autumn, it increased by £ 70 billion to finance with higher borrowing and £ 40 billion tax increases.
At that time, he insisted that there was a one -time movement by saying to MPs, saying that we would not return with more tax increase or indeed more borrowing.
The Reeves can potentially adjust corporate tax rates and allowances, which can increase significant tax revenues, but this will be contrary to the promise of 25% of the previous company tax during the life of the parliament.
In addition, the employer who entered into force in April will have a negative impact on the work trust that already made a stroke after a hike to the NICs.
