Rachel Reeves to Outline Major Tax and Spending Changes in Next UK Budget
Chancellor Rachel Reeves is preparing to present a new UK Budget that could bring sweeping changes in taxes and public spending as the government grapples with a large fiscal shortfall. Sources close to the Treasury say the Budget, expected this week, will include a mix of tax rises, benefit reforms and increased funding for key public services — reshaping economic policy in Britain.
Reeves is reportedly considering freezing income tax thresholds — a move that effectively acts as a stealth tax by pulling more people into higher bands as wages rise. Employers’ National Insurance contributions may also see further hikes, reflecting the government’s need to raise revenues without directly increasing income tax or VAT for workers.
On the spending side, the Budget is expected to expand welfare support, including possible reforms to benefits rules, while boosting public investment in healthcare, infrastructure, and other public services — a balancing act between social commitments and fiscal responsibility.
At the same time, Reeves may impose new levies on high value properties and “mansion tax” style surcharges on homes over certain thresholds, along with possible reforms to capital gains, inheritance tax and other wealth based taxes — shifting part of the burden towards wealthier individuals and property owners.
With public finances under pressure, the Budget could mark a turning point for UK economic policy: a recalibration of taxes and spending that aims to narrow the deficit — but risks generating public backlash over higher costs for homeowners, savers, and working households alike.
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