Rachel Reeves plans £7.5bn tax rise in budget after U-turn on income tax rates

Chancellor expected to freeze level at which people start paying income tax for two years rather than putting rates up

Rachel Reeves will put a £7.5bn tax rise at the heart of her budget after scrapping a separate plan to increase income tax rates just days before the announcement.

The chancellor has decided to freeze the level at which people start paying income tax for two years, according to government sources, rather than breaking a manifesto promise and putting rates up, as had been planned for several weeks.