Rachel Reeves Unveils Bold Tax Reforms in UK Budget

British finance minister Rachel Reeves presented a budget seeking increased taxation from various sectors including income, high-value homes, and electric vehicles. These measures aim to improve fiscal room for borrowing targets, while reforms also touch on welfare and reforms to the 'motability' scheme for the disabled.

British finance minister Rachel Reeves delivered a notable budget statement to parliament, announcing a range of new taxes and reforms aimed at increasing fiscal space for government borrowing. Her speech coincided with an unusual release of economic forecasts by the Office for Budget Responsibility, which was attributed to a "technical error."

Among the key measures is the freeze on income tax thresholds for three additional years from 2028, estimated to raise 7.6 billion pounds. A significant new council tax surcharge on expensive homes will also be enacted, targeting properties valued over 2 million pounds to generate substantial revenue.

Additionally, the budget introduces a mileage-based charge for electric and plug-in hybrid vehicles to counteract potential future losses from fuel duty, in line with increasing eco-conscious transport policies. Other tax rate adjustments include a rise in dividend tax rates and changes to commercial property taxes, impacting various sectors notably retail, hospitality, and online commerce.

(With inputs from agencies.)