The Chancellor is preparing to hit homes in the highest council tax bands with a new surcharge
The Chancellor is preparing to hit properties in the F, G, and H council tax bands with a new levy, according to reports in the Telegraph.
The additional rate will be imposed after valuations, which determine the bands, are reviewed for over 2.4 million properties.
It is expected that the moves will see 26 local authorities across England affected – and 15 per cent of the homes in London and the South East facing higher taxes.
Shadow Chancellor Sir Mel Stride told the Telegraph that the planned measures amounted to a "class war against middle England".
He said: "If Starmer and Reeves decide to introduce a new tax raid on family homes, they will be punishing aspiration and hitting hard-working people.
“Under Labour, nothing is safe – not your job, your home, your savings, or your pension.”
The latest policies under consideration for the fiscal event comes after Ms Reeves and Prime Minister Sir Keir Starmer informed the Office for Budget Responsibility (OBR) that they would not be hiking rates on November 26 in a shock U-turn.
Reeves had appeared to all but confirm she would be raising income tax last week, breaking from her party's 2024 election manifesto pledge.
The Chancellor had told the public in a Downing Street press conference last week that "everyone has to play their part" in fixing Britain's broken finances.
The speech was widely interpreted as confirmation that the Treasury would raise the basic rate of income tax by 2 per cent.
But this week, the OBR told the Chancellor the hole in the nation’s finances is closer to £20billion, rather than the previously feared £30billion.
Instead, she is reported to be considering freezing thresholds at which tax rates are set – which will raise billions for the Exchequer as wages grow.
Limits to salary sacrifice schemes and new measures to tax electric vehicles are still in the mix, as the Treasury pursues a "smorgasbord" approach of raising a range of smaller taxes.
She is also expected to go ahead with a reported raid on pension contributions.
Tory leader Kemi Badenoch called the income tax U-turn “good (if true.)”
In a post on X, she said: "Only the Conservatives have fought Labour off their tax-raising plans.
"But one retreat doesn’t fix a Budget built on broken promises. Reeves must guarantee no new taxes on work, businesses, homes or pensions – and she should go further by abolishing stamp duty."
Liberal Democrat deputy leader and Treasury spokeswoman Daisy Cooper described the move as an “11th hour screeching U-turn” but said struggling families could be spared “yet another punch in the stomach Budget”.
