𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Chancellor Rachel Reeves has sparked more tax hike fears as she confirms she wants to boost her fiscal buffer in October’s Budget. She said “more headroom would be good”, indicating she will either look to raise more funds through tax increases, or via spending cuts.

Ms Reeves added that she would like to raise an additional £9.9 billion to help the UK be better prepared for financial shocks.

She told Bloomberg TV: “In a world as volatile as it is today, having a bit more of a buffer can help absorb shocks.

“Obviously, more headroom would be good, but there’s always trade offs because, of course, to build more headroom, you would have to increase taxes further, or cut spending, further.”

Ms Reeves added that any tax rises would be focused on the wealthy, but she did not want to target businesses or banks.

It is expected that Ms Reeves will look to raise cash for the exchequer via hikes on the wealthy after the Chancellor said those with the “broadest shoulders” should contribute more.

Speaking in Washington, she added: “We’re not going to be introducing a wealth tax. We already have a number of taxes, though, in the UK that do tax wealth and do tax wealthy people, and some of those we did increase in the Budget last year, like putting VAT on private schools, getting rid of the non-domicile status, extended taxes on private jets.

“I think that they were the right policies in the circumstances that we faced.”

It has also been reported that Ms Reeves is planning £1 billion worth of cuts to the Motability Scheme. Luxury cars, including Mercedes and BMWs, could be removed from the scheme, The Times reported.

The Institute for Fiscal Studies has said that at least £22 billion needs to be raised via tax hikes or spending cuts in the November Budget to avoid a financial “groundhog day.”