A leaked memo from Deputy Prime Minister Angela Rayner has proposed tax increases, including the scrapping of the dividend allowance, which could generate around £325 million annually.

The Conservative Party is pressing Chancellor Rachel Reeves to categorically rule out raising taxes on investments in the upcoming autumn budget, expressing concerns that such uncertainty could negatively impact the economy.

Among the proposed tax changes outlined in the memo are the removal of the dividend allowance, the elimination of inheritance tax relief for AIM shares, and an increase in dividend tax rates.

In response, a Labour Party spokesperson criticized the Conservatives for their past economic management, particularly referencing the negative consequences of the Liz Truss mini-budget.

The spokesperson also highlighted Labour's commitment to supporting businesses through trade deals and interest rate cuts, positioning Labour as more business-friendly.

Despite previously asserting that she would avoid new borrowing or tax increases, Chancellor Reeves has not definitively ruled out raising certain taxes, which has been labeled 'irresponsible' by critics.

Shadow Chancellor Mel Stride has condemned the Labour Party's proposed tax increases, arguing that they are harmful to economic growth and do not align with the needs of businesses.

The Chancellor is currently facing a significant budget shortfall due to prior government reforms, raising speculation about the necessity of tax hikes to address this financial gap.

Recent policy reversals by the government have resulted in a multibillion-pound budget deficit, further intensifying concerns over potential tax increases.

The Conservatives assert that eliminating the £500 dividend allowance could subject an additional 5.22 million UK citizens to dividend taxes, increasing the total affected population.

Currently, approximately 3.6 million individuals are already paying dividend tax, with around 8.82 million in the UK owning shares that pay dividends.