Overview
- Chancellor Rachel Reeves has abandoned a rise in headline income tax rates and is now expected to extend the freeze on income tax thresholds to around 2030, a move estimated to raise about £8.3bn a year and affect roughly 10 million people.
- Reeves told Labour MPs she will include a mansion tax in the 26 November Budget, with officials developing an annual surcharge on high‑value homes and deferral options for asset‑rich, cash‑poor owners.
- Updated OBR rounds have reportedly reduced the fiscal shortfall by about £10bn, while the broader gap is still put near £20bn, and gilt yields jumped by up to 14 basis points during the communications U‑turn.
- Freezing thresholds is set to pull millions into higher tax bands, including about 500,000 additional higher‑rate payers across London and the South East by 2029/30, according to House of Commons Library research.
- Treasury planning points to a ‘smorgasbord’ of smaller measures still in play, including limits on salary‑sacrifice pensions, potential ISA allowance cuts, new charges affecting electric vehicles, and property‑focused changes.