Rachel Reeves considers cutting tax-free pension lump sum to raise billions
While Rachel Reeves tries to put a billion -pound hole in public finance, he may consider the discontinuation of the amount allowed to withdraw from the pension containers.
Chancellor, civil servants, how much to be allowed to get out of the tax payment of the limit to reduce the limit of £ 2 billion will look at the bids.
Currently, pensioners can take one quarter of their retirement pots without tax without a limit of £ 268,000. Reducing the level can bring additional tax revenue of billions of pounds each year, because the Treasury has a black hole up to £ 50 billion.
The Treasury did not ignore the reduction of the border with the collective amount of tax exempted from the tax, but an official said The Daily Telegraph “Not possible”. However, experts said that Reeves may be forced to take into account the movement because of the large amount that should be found in this autumn budget.
The leading economists warned Mrs. Reeves that they should increase taxes or tear the flagship debt rules to fill the land hole of 50 billion pounds left with a combination of higher borrowing, higher borrowing and stagnant economic growth.
The National Institute of Economic and Social Research (NIESR), a leading economic thinking tank, said that Chancellor could look at the expenditure deductions in the budget to attach £ 41.2 billion to the targets set by his own so -called financial rules.
In order to restore an almost 10 billion pound buffer in the current estimates, the chancellor should collect a total of £ 51.1 billion.
Ms. Reeves is said to be thinking of hitting high -valuable property owners with capital gain tax when they sell their homes as part of the attempt to compensate for the expenditure gap.
Since the chancellor searches for ways to collect cash in the face of terrible warnings about the situation of public finances, it is said that it ends the existing exemption from the capital earning tax for primary houses – a move to be seen as “mansion tax ..
While talking Telegram“Rachel Reeves, the manifesto promises to increase the tax revenue from the table. However, an option that remains open to him is to target retirement tax discounts.”
Pension Minister Torsten Bell had previously proposed to reduce the tax -exempt collective payment limit to £ 40,000.
The chancellor received a support on Thursday, but government borrowing slowed down to a lower than expected in July.
The National Statistics Office said that the figure, which was 2.3 billion less than the same month of the previous year, was the lowest July borrowing figure for three years.
After an increase in self -evaluated income tax and national insurance payments, it helped to increase tax receipts for the month.
The July borrowing was lower than the £ 2 billion, which was envisaged by the economists of the economists. Borrowing for the first four months of the financial year was 60 billion – £ 6.7 billion more than the same period last year.
Rob Doody, Deputy Director of the Ones Public Sector Finance, said: “Borrowing in July this month fell $ 2.3 billion last year and the lowest July figure for three years.
“This reflects the powerful increases in tax and national insurance receipts. However, as a whole in the first four months of the financial year, borrowing was higher than £ 6 billion in 2024.”
Treasury Chief Secretary Darren Jones said, “We invest in our public services and modernize the state to improve the results in the medium term and reduce costs.
“Too much taxpayers are spent on interest payments for the long -standing national debt.
“That’s why we prevent borrowing throughout the parliament – so working people do not have to keep up with the invoice, and we can invest in better schools, hospitals and services for working families.”
