Reeves urged to reform taxes for £20bn boost in funding

Rachel Reeves is facing pressure from the Resolution Foundation, a left-of-centre thinktank, to implement tax reforms in her upcoming budget. The proposed changes focus on capital gains tax, inheritance tax, and national insurance, aiming to generate over £20 billion annually for the Treasury. This comes as Reeves seeks to address a £22 billion shortfall in public finances, emphasizing the need for 'tough decisions' in her fiscal strategy. The thinktank argues that tax increases are a traditional response in the first budget following an election, and Reeves has inherited £24 billion in tax hikes from her predecessor, Jeremy Hunt. These include a planned rise in fuel duty, which the foundation suggests should remain, while advocating for the cancellation of an impending increase in stamp duty. The Resolution Foundation highlights that reforms to capital gains tax could yield up to £12 billion, suggesting alignment of CGT rates with dividend tax rates and taxing property gains similarly to wages. Additionally, they propose changes to national insurance that would benefit workers saving through auto-enrolment. The thinktank also calls for closing loopholes in inheritance tax to ensure the wealthy contribute fairly. By addressing these areas, Reeves could not only meet her fiscal commitments but also enhance public trust in the tax system, making it fairer and more efficient for all taxpayers.