The Chancellor is likely to have to find ways of raising money in the budget to balance the books as she deals with sluggish growth, higher borrowing costs and U-turns over welfare savings.
Measures reportedly under consideration include scrapping the capital gains tax exemption for expensive private homes and changes to inheritance tax rules.
Ministers and officials have repeatedly declined to rule out tax-raising measures ahead of the budget, but the Tories will challenge the Government to do so in a Commons vote on Wednesday.
Tory leader Kemi Badenoch said: “We will force a vote in Parliament to make the Government rule out these damaging property taxes once and for all.”
Other measures which have been suggested include a new property tax to replace stamp duty on owner-occupied homes and a tax increase on landlords by imposing national insurance on rental income.
The scale of the challenge facing the Chancellor in the autumn budget was illustrated by the NIESR economic think tank warning this month that Ms Reeves is set for a £41 billion shortfall on her self-imposed rule of balancing day-to-day spending with tax receipts in 2029-30.
That would require tax hikes or spending cuts amounting to around £51 billion if she wanted to maintain her current level of “headroom”, the buffer by which she avoids breaking the rule.
⚡️OUT NOW⚡️ The #Chancellor‘s impossible ‘trilemma’ (fiscal rules, tax&spend commitments, manifesto promises)💥
Our latest UK Economic Outlook suggests the Chancellor will need to find over £40bn in the Autumn #Budget to fill the gap📈
Read more here👇https://t.co/TM1CuiT9fT
— National Institute of Economic and Social Research (@NIESRorg) August 6, 2025
Mrs Badenoch said: “Rachel Reeves’s tax bombshell has killed growth, opening up a £50 billion black hole in the public finances. Because of her decisions, she is now scrambling around trying to find new things to tax – it’s a tax doom loop.
“Fresh from their war on private enterprise and farming, Labour look set to wage a new war on family homes with more taxes like those that Labour ministers seemingly want to avoid paying themselves.
“Conservatives don’t believe you should pay capital gains if you sell your family home, nor should mums and dads be penalised for helping out their children.
“And if you’ve lived in your home for years, why should you now face a new punitive annual tax.
“Conservatives are the only party committed to living within our means so we can cut the deficit and lower taxes.”