What does the income tax U-turn mean for your salary?

The income tax U-turn has left the Treasury looking at other options

In a major U-turn, Chancellor Rachel Reeves’ is understood to have ripped up plans to hike income tax in the looming Autumn Budget.

Reeves was poised to hitch up income tax by 2p at the end of the month, whilst cutting national insurance – for lower earners – by the same amount.

While the decision saves Labour from the drama and backlash that would come with breaking the manifesto pledge not to raise taxes on ‘working people’, the decision has once more yanked the Treasury back to the drawing board.

After failed attempts to raise revenue through scrapping winter fuel payments and reforming the welfare system, the Treasury is scrambling to fill public coffers with only two weeks left until Budget day.

Charlotte Kenn