Rachel Reeves is reportedly set to drop plans for a tax raid on pensions over fears it could unfairly affect public sector workers. The Chancellor has been warned that a scheme to reduce the 40 per cent tax relief on higher earners could disproportionately impact teachers and nurses,

Rachel Reeves was expected to reduce the current 40 per cent level of tax relief on higher earners in the Budget, but has changed direction

Exchequer secretary James Murray MP confirmed this at a Labour conference fringe event hosted by the British Retail Consortium, saying: “It’s within the current envelope. It’s all about raising the same amount of money overall, that’s the commitment.”

The Chancellor is preparing to set the direction of the Government's economic policy as she announces her approach to the public finances

Chancellor Rachel Reeves is also said to be reassessing its tax reforms for non-domiciled individuals, following warnings that the changes could lead to a “wealth exodus” and ultimately reduce revenue. A "non-dom" refers to a UK resident whose permanent home, or tax domicile, is considered to be outside the UK.

Rachel Reeves has reportedly dropped plans for a pension tax raid, amid Treasury concerns that it would penalise up to a million public sector workers. Senior officials from the department told the Chancellor that cutting the 40 per cent tax relief on higher earners would have a disproportionate impact on public sector workers on modest incomes.

LABOUR’s pension tax raid is set the ditched after warnings it would hammer up to a million teachers, nurses, and public sector workers. Chancellor Rachel Reeves had planned to

The Chancellor had planned to raise funds by reducing tax relief on those earning £50,000 or more per year, but officials said the move would hit workers who have just been handed a pay rise.