Published by Global Banking & Finance Review®
Posted on November 23, 2025
1 min readLast updated: January 20, 2026
Add as preferred source on GoogleRachel Reeves will remove the UK's child benefits cap, costing 3 billion pounds annually. A new property tax will target homes over 2 million pounds.
LONDON (Reuters) -British finance minister Rachel Reeves will scrap a cap on child welfare benefits in her budget this week, dropping the possibility of a less costly partial reform, newspapers reported on Sunday.
The Times and The Telegraph said Reeves would announce the removal of the two-child cap on benefits, the cost of which has been estimated around 3 billion pounds ($3.93 billion) a year.
The Times also said Reeves would hit owners of expensive properties with a tax surcharge on homes worth 2 million pounds or more, instead of the 1.5 million-pound threshold that had been considered.
A Treasury spokesperson declined to comment on the reported property tax surcharge. Britain's Department for Work and Pensions was approached for comment on the reports of the plan to scrap the child benefit cap.
Reeves is due to announce her annual tax and spending plans on Wednesday. She is seeking to show bond market investors that she remains on track to meet her fiscal targets, despite an expected downgrade of the economic outlook.
($1 = 0.7635 pounds)
(Writing by William Schomberg; Editing by Richard Chang)
A tax surcharge is an additional tax imposed on top of the standard tax rate, often applied to specific categories such as high-value properties or luxury items.
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