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Reeves Drops Income Tax Rise, Plans Threshold Freeze and New Property, Sugar and Tourist Levies

The change follows a reported U‑turn on raising income tax after improved budget forecasts.

Overview

  • Reports say the Budget will extend the freeze on income tax thresholds to 2029/30, projected to raise about £8 billion a year and pull roughly 10 million people into higher taxation.
  • A House of Commons Library analysis cited in new coverage indicates nearly 500,000 more people in London and the South East would pay the 40% rate by 2029/30 under the extended freeze.
  • Treasury plans reported across outlets include a council‑tax revaluation for bands F–H affecting about 2.4 million properties and a surcharge on roughly 300,000 high‑value homes, with an option to defer payment until sale or death.
  • Multiple reports say the Soft Drinks Industry Levy would be widened to milk‑based drinks and the sugar threshold cut to 4g per 100ml, with estimates of £50m–£100m in additional revenue.
  • The Times reports that regional mayors would gain powers to levy overnight stay charges on hotels and short‑term lets, a move expected to raise hundreds of millions for local services and drawing criticism from the hospitality sector.