Chancellor expected to target Britain’s wealthy with exit and mansion taxes among other options

Britain's Chancellor of the Exchequer Rachel Reeves. Photo / Getty Images

An exit charge for wealthy Britons leaving the country and increased levies on expensive homes are on a long-list of possible tax increases being considered by Chancellor of the Exchequer Rachel Reeves ahead of the Budget.

Treasury officials have drawn up options for dozens of possible hikes to help Reeves fill a fiscal hole of as much as £35 billion ($80b) on November 26, only some of which she will eventually proceed with, according to people familiar with the matter.

They cautioned that the Chancellor hasn’t decided which tax rises she’ll pick.

She would only do so once she receives the final financial forecast from her budget watchdog and has a clear picture of how much revenue she needs to raise, they said.

In a speech last night NZT, Reeves promised to “do what is necessary to protect families from high inflation and interest rates”, the BBC reported.

She said she wanted people to understand the circumstances the country is in.

The Chancellor said: “If we are to build the future of Britain together, we will all have to contribute to that effort”.

She spoke about building “more resilient public finances with the headroom to withstand global turbulence”.

Reeves is considering bolder and more progressive tax changes than some investors and Labour MPs have been expecting, Bloomberg reported at the weekend.

She wants to take advantage of a productivity downgrade from the Office for Budget Responsibility, which is set to deliver a further £20b hit to public finances, to simplify the tax system and make it fairer, people familiar with the matter said.

That means many of the potential tax hikes being considered are focused on the better-off, the people said. The Times newspaper reported that Reeves is keen on introducing a “settling-up charge” on wealthy Britons fleeing for tax havens.

While those emigrating from the country can currently sell UK assets after leaving without facing capital gains tax, the Chancellor is mulling making them pay a 20% charge at the point of departure, the newspaper reported. It would raise some £2b for the Treasury.

Many other major economies already have similar policies, though some tax experts doubted whether Reeves would go ahead with an exit tax. Dan Neidle of Tax Policy Associates said on X that the Government faced a risk that people would see speculation about the policy and leave to pre-empt it.

Reeves has faced criticism that she has presided over a “wealth exodus”. A number of high-profile investors and entrepreneurs quit the United Kingdom in response to Labour abolishing non-domiciled tax status at its first Budget after winning the general election last year.

Several newspapers have reported that Reeves is looking at reforming council tax to raise more revenue from Britain’s more expensive properties.

That has led to suggestions that she is effectively considering a tax on mansions, a policy that has been popular with Labour MPs in the past.

An opinion poll last week showed that most Britons would support a wealth tax, although Reeves has repeatedly ruled out imposing a standalone levy.

Other options could include maintaining a freeze on personal tax thresholds, extending National Insurance Contributions to limited liability partnerships and landlords, and new taxes on online gambling.

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