A new report from the Organisation for Economic Co-operation and Development (OECD) calls on the chancellor Rachel Reeves to abolish Stamp Duty Land Tax, among a host of other changes to help stabilise the UK’s finances.

Among its key recommendations, the OECD suggested scrapping stamp duty, which it argued hinders people from moving to pursue better job opportunities or downsizing in retirement, thus disrupting the housing market.

The report also advised unfreezing fuel duty, simplifying the income tax system, and limiting the amount of interest expenses that companies can deduct from their taxes. Additionally, the OECD proposed updating the property valuations used to determine council tax, which in England are still based on 1991 values.

The OECD, representing 38 advanced economies, highlighted that these challenges come on top of the UK’s existing fiscal difficulties of high debt, rising interest payments, and sluggish economic growth, all of which contribute to increasing borrowing costs over time.

This warning from the OECD adds to the growing concerns about the UK’s debt trajectory, following a recent forecast by the Office for Budget Responsibility that debt could reach 270% of GDP within 50 years due to escalating healthcare and pension expenditures.

In her upcoming budget on 30 October, Reeves is expected to address approximately £22bn of government overspending, with potential tax hikes being considered.

The OECD’s report suggests that the costly pension triple lock should be scaled back, proposing that pension entitlements rise in line with an average of inflation and wage growth, rather than the current system where pensions increase by the highest of 2.5%, inflation, or pay growth. The International Monetary Fund has similarly recommended curbing the the triple lock to help contain costs.

The OECD emphasised that “significant action is needed to stabilise public debt over the longer term”, calling for a fairer and more efficient tax system.

The chancellor is facing growing pressure to make the necessary fiscal reforms to stabilise the UK’s finances, and that should include an inheritance tax raid, according to another think-tank.

Chancellor urged to launch £2bn inheritance tax raid on family homes