Wealthy and pensioners susceptible to new tax raid in autumn Budget, consultants warn | EUROtoday

Pensioners and the rich may face a shock tax raid by Rachel Reeves in October, main economists have warned.

Paul Johnson, the director of the highly-respected Institute for Fiscal Studies (IFS) suppose tank, mentioned in his post-spring assertion briefing that the chancellor had left herself uncovered to minor forecast modifications and warned there was a “good chance” she would want to lift taxes in her autumn Budget.

He added he was involved pensions “look like a juicy place to go for a lot of money”.

“That risks months of speculation over what those tax rises might be – a raid on pensions, a wealth tax on the richest, another hike to capital gains tax?”

He additionally warned that “mere speculation about increases can cause economic harm.”

As doubts develop over Ms Reeves’ plans, former Tory chancellor Ken Clarke additionally urged the chancellor must elevate earnings tax or Value Added Tax (VAT) in October.

He instructed Times Radio he would have elevated VAT on Wednesday, including: “I think she’s got to go for value added tax or some levels of income tax in the autumn, probably VAT.”

The IFS also warned that new official data shows a dramatic decline in living standards over the last year.

In the 12 months to March last year, real average household income fell by 2 per cent, the think tank said, implying there had been no growth in incomes since 2016.

Ms Reeves denied there would be further tax rises or spending cuts at the Budget in the autumn, but stopped short of ruling them out entirely.

Asked if she would have to return with more cuts or tax rises, she said: “No.”

But pressed if this meant she may rule out these measures, she replied: “What I’m saying is that there are loads of things that this government are doing that are contributing to growth.”