Rachel Reeves drops huge tax bombshell as she hints at major hike | Politics | News
Chancellor Rachel Reeves has sparked fears of further tax rises by confirming she wants to increase her fiscal buffer in the October Budget. He said he would try to raise more funds either through tax increases or spending cuts, saying “more headroom would be good.”
Ms Reeves added that she wanted to raise a further £9.9bn to help the UK better prepare for financial shocks.
he said Bloomberg TV: “In a world as volatile as it is today, having a little more buffer can help absorb shocks.
“Of course more headroom would be nice, but there are always trade-offs because of course you have to raise taxes further or reduce spending further to create more headroom.”
Ms Reeves added that any tax increases would focus on the wealthy but did not want to target businesses or banks.
Ms Reeves is expected to try to raise cash for the exchequer through pay rises for the wealthy, after the Chancellor said those with the “broadest shoulders” should contribute more.
Speaking in Washington, he added: “We will not introduce a wealth tax. “However, in the UK we already have a range of taxes that tax wealth and tax rich people, and we increased some of these in the Budget last year, for example putting VAT on private schools, getting rid of non-resident status, extending taxes on private jets.
“I think these are the right policies under the circumstances we face.”
It has also been reported that Ms Reeves is planning £1bn worth of cuts to the Motability Programme. According to The Times, luxury cars, including Mercedes and BMWs, may be excluded from the plan.
The Institute for Fiscal Studies said at least £22bn needed to be raised through tax rises or spending cuts in the November Budget to avoid a financial “groundhog day”.
