Chancellor Rachel Reeves says she needs to raise £20bn. How might she do it?

Published On Oct 2, 2024, 6:11 AM

Chancellor Rachel Reeves is preparing for the upcoming Budget on October 30, aiming to address a £22 billion overspend in public finances. She has ruled out increasing major taxes such as income tax, VAT, National Insurance, and corporation tax, which complicates her effort to raise an estimated £20 billion. Possible revenue sources discussed include adjustments in capital gains and inheritance taxes, but they may not yield significant sums alone. There is also potential for changes to the tax treatment of pension contributions, which could produce substantial revenue. The Chancellor’s tax strategy could either focus on immediate revenue generation or long-term reforms to the tax system's flaws. The final fiscal plan will be revealed in the Budget announcement.