Overview
- The chancellor has reportedly abandoned a headline increase in income tax rates ahead of the 26 November Budget, pivoting to alternative revenue measures still to be confirmed.
- An extension of the freeze on personal tax thresholds to 2029/30 is widely expected, with estimates of roughly £8bn a year in extra revenue and about 10 million people affected.
- House of Commons Library research suggests nearly 500,000 additional workers in London and the South East would be pulled into the 40% band by 2029/30 under a prolonged freeze.
- A package of smaller taxes is under consideration, including mayoral powers for hotel overnight levies, an expanded soft drinks levy covering dairy-based drinks with a lower sugar threshold, possible pay-per-mile charges for EVs, an online gambling levy, and a council tax surcharge on high-value homes.
- Markets reacted negatively to the reported U-turn with a notable intra-day gilt sell-off, the IFS warned a patchwork of smaller taxes could hurt growth, and new polling shows many voters think the Budget handling has been poor while the Treasury declines to pre-announce measures.