Think Tank Urges Rachel Reeves to Overhaul UK Tax System in November Budget

Britain’s finance minister, Rachel Reeves, is being urged to deliver a bold reform of the UK taxation system in her upcoming November 26 budget, rather than relying on short-term fixes or raising existing tax rates. The Institute for Fiscal Studies (IFS) has called for a comprehensive and strategic overhaul that could boost government revenue while minimizing the economic impact.

According to the IFS, Reeves faces the challenge of finding approximately £30 billion ($40 billion) to meet her fiscal targets and repair public finances. However, the think tank warned against “directionless tinkering and half-baked fixes.” Isaac Delestre, a senior research economist at the IFS, emphasized that the chancellor has “an opportunity to take real steps toward a more rational tax system.”

Reeves and Prime Minister Keir Starmer have pledged not to increase income tax, value-added tax (VAT), or national insurance for working people, nor to raise the main corporate tax rate. With limited options, attention is turning toward wealth and property taxation as potential revenue sources.

The IFS suggested reforms to existing wealth-related taxes—such as capital gains tax—rather than introducing a new annual wealth tax, which some Labour lawmakers have proposed. On property, the institute recommended shifting local tax burdens toward high-value areas like London, which have seen sharp house price increases, and scrapping the stamp duty on property transactions to encourage market activity.

Meanwhile, the National Institute of Economic and Social Research (NIESR) proposed that Reeves reconsider her tax pledges if necessary, arguing that raising taxes on working people might be less harmful than other, more distortionary revenue measures.

As expectations build ahead of the November budget, economists agree that meaningful reform—rather than incremental adjustments—could define Reeves’ fiscal legacy and reshape the UK’s economic landscape.