Budget income tax hike looms, so be prepared

CHANCELLOR Rachel Reeves is running out of ways to fill her growing black hole without breaking Labour's election pledge, and income tax now looks firmly in her sights.

- By Harvey Jones

During the election Labour promised not to raise rates of income tax, national insurance or VAT, but with the Treasury facing a shortfall of £30billion or more, Reeves appears to be exploring creative ways around that.

Tom Selby, director of public policy at AJ Bell, said Reeves has been left "performing mental gymnastics" as she tries to balance the books without shredding the manifesto. "This contortionist act now appears to be circling the idea of adding 2p to the basic rate of income tax while cutting 2p from national insurance (NI)."