Headlines
UK's Reeves weighing income tax rise to tackle deficit, The Guardian reports
Published by Global Banking & Finance Review®
Posted on October 23, 2025
1 min readLast updated: January 21, 2026
Global Banking & Finance Review®
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Published by Global Banking & Finance Review®
Posted on October 23, 2025
1 min readLast updated: January 21, 2026
The UK finance minister is considering an income tax hike in the next budget to address a £30 billion deficit, potentially breaking Labour's pledge.
LONDON (Reuters) -The British finance minister is considering raising income tax in next month's budget to help reduce a multibillion-pound deficit, The Guardian reported on Thursday, citing sources familiar with the matter.
The discussions come as Reeves faces an estimated shortfall of more than 30 billion pounds ($40.26 billion), the newspaper reported. It said Reeves is in active talks over whether to break one of Labour's key manifesto pledges, which include not to raise income tax.
The Guardian said officials were weighing options including an increase in the basic rate of income tax or changes to thresholds, though no final decision has been made.
A Treasury spokesperson did not immediately respond to a Reuters request for comment.
(Reporting by Sam Tabahriti, Editing by Franklin Paul)
Income tax is a tax imposed on individuals or entities based on their income or profits. It is typically calculated as a percentage of the income earned.
A financial deficit refers to a situation where an entity's expenditures surpass its revenues, leading to a shortfall that needs to be addressed.
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