𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Rachel Reeves is preparing to offer tax breaks to lure high-earners back to the UK, targeting wealthy Gulf residents displaced by the turmoil of the Iran war. In a move that follows months of criticism that her tax rises have driven millionaires abroad, Ms Reeves will use this week’s International Monetary Fund meetings in Washington to declare Britain “open for business”.

A senior Treasury official said: “Geopolitical risk is now reshaping where people live, invest and build companies, and the Government is determined to respond.” The Chancellor will announce a formal consultation on the taxation of Limited Liability Companies — an issue repeatedly raised by potential arrivals as a barrier to moving to Britain.

The Treasury source added: “We will examine options across the entire tax system to keep the UK fair and competitive, including targeted reliefs for new arrivals and reforms to offshore structures.”

The initiative comes after Ms Reeves was accused of chasing away the wealthy with successive tax increases. The Government now hopes the changes will reverse the exodus and bring high-earners back at a time when instability in the Middle East has left many in the Gulf reconsidering their plans.

Ms Reeves is also expected to use her Washington trip to pitch Britain as a “safe-harbour economy”. She will stress that the Government is keeping a tight grip on the public finances while investing in skills, infrastructure and new industries.

However, the timing is awkward. In its latest forecasts the IMF slashed Britain’s growth outlook for 2026 to just 0.8% — the largest downgrade for any major rich economy — citing the UK’s costly exposure to the inflationary shock from the Iran war.

The Treasury official insisted the tax consultation was about making the UK’s offer more attractive rather than a broad tax cut. The source said: “We will consult on options across the tax system to keep the UK’s offer fair and competitive.”

The announcement marks a sharp change in tone from earlier in the parliament, when Reeves’s budgets focused on raising revenue through higher employer National Insurance, frozen tax thresholds and changes to non-dom rules that prompted warnings of a millionaire exodus to Dubai and other low-tax jurisdictions.

Critics have repeatedly claimed those measures damaged Britain’s appeal as a place for the super-rich to live and invest.

Now, with the Iran conflict disrupting Gulf wealth and prompting some residents to look elsewhere, Reeves appears ready to soften parts of the tax regime to win them back.