Reeves weighs tax package to plug 40-50bn gap ahead of autumn budget

Chancellor Rachel Reeves is reported to be weighing a package of tax changes ahead of the autumn budget as ministers seek to close a funding gap estimated at between 40 billion and 50 billion. Options under consideration include a further freeze on income tax thresholds, applying national insurance contributions to rental income, reforming stamp duty into an annual property levy and extending capital gains tax to high-value main residence sales. Officials say the measures are being examined to raise revenue while remaining within the chancellor's pre-election pledges not to raise VAT, income tax rates or national insurance rates.

Under one proposal, freezing income tax thresholds for several years would push more workers into higher bands and could raise around 7 billion a year if maintained to the end of the decade. Another option would apply national insurance to rental income, a move estimated to generate about 2.1 billion based on recent net property income data. Separate measures under discussion could replace stamp duty with a progressive annual property tax on sales above 500,000 and remove private residence relief on homes sold for more than 1.5 million, subjecting...