The Rest Is Money 211. How Should Reeves Fill The £30bn Hole?
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Sep 28, 2025 Ruth Curtice, the former Director of Fiscal Policy at the UK Treasury and now chief executive of the Resolution Foundation, dives into the complexities of tax solutions to address a £30 billion budget hole. She discusses innovative strategies like aligning business taxes, introducing a sugary foods tax, and reforming vehicle taxes by mileage. Ruth emphasizes the impact these changes could have on the self-employed and advocates for measures to collect unpaid taxes from small businesses. Her insights reveal how thoughtful tax reforms can foster growth while being fair.
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Protect Pay Packets By Rebalancing Taxes
- Increase income tax while cutting employee National Insurance to protect pay packets.
- This shifts taxation from employment to other income sources while keeping take-home pay stable.
Narrowing The Employment-Other Income Gap
- Shifting 2p from NI to income tax keeps employees' net pay unchanged but raises tax on landlords and pensioners.
- That narrows the gap between taxed employment income and other income, reducing a work disincentive.
Account For Self-Employed Impact
- Expect self-employed people to pay about 2% more under the swap and remain relatively low taxed historically.
- Factor in recent favourable changes for the self-employed when designing fair tax adjustments.