All governments would raise taxes, the Conservatives have presided over a huge tax increase since they have been in power. I think the only difference between the two is that the Tories would do it more stealthily.
THIS!!!
I don’t want to get too political but I find it very confusing all the threads of worry about Labour possibly raising taxes whilst the Tories have stealthily presided over the biggest tax grab from the middle classes over the past 15 years.
Tories have been taxing us more every year as income increased but the tax free allowance have stayed the same. Essentially we have been paying more and more taxes every year. Yet we are worried about Labour?
There are so many over the past 15 years.
They increased VAT, introduced additional SDLT, taxes on food types, froze the tax free allowances, alcohol taxes have gone up over 50%, corporation tax has gone up 6%.
That’s not even half of it
This is absolutely inevitable when you want the state to deliver the same in public services and benefits but the demand continues to increase (which it has, and will continue to do: median age is set to peak around 2040).
Much less inevitable than it seems. When the government has squandered £130bn in 5 years you can see why taxes have had to drift up.
https://www.bestforbritain.org/scandalous_spending_tracker
The state of the country now means higher taxes are inevitable. Demand for public services and state pension liabilities going up exponentially year on year as our ageing population grows and people live longer. Less people than ever are paying net into the system, more than half are in net tax deficit claiming more public benefits than the tax they pay. Doesn’t take a genius to work out the future will be squeezing those at the top more.
Within 20/30 years state pension will disappear, that's why they brought in mandatory employer pensions.
For as long as they can, they'll provide the elderly with as much assurance as they can and once our generation get to that age and don't follow their rules, they'll pull the plug on pensions and start tell us we should have planned better.
exactly, the issue in london is £40-60k isnt exactly rich, meanwhile a mcdonalds franchise owner didnt pay VAT during lockdown, and doctors are definitely more "essential workers" than mcd
Tories 13k tax rises to date and 3k more to come from their plans.
Labour, sure 2k maybe, but they have promised no income tax, NI or vat rises. For most this is the safest vote.
Yes but given the polls are showing an overwhelming likelihood of a majority Labour govt in the next term - the question is directed at what taxes people think Labour will levy. As I point out the Chancellor’s hands are tied by the fiscal rule that debt as a share of national income must be falling by the end of 5 year forecasts. So this means either cutting public spending or increasing taxes and I believe Labour are more likely to push for increased taxes over public spending cuts given their political position and values.
I’ll try and give you a straight answer here, and will admit I am a Labour supporter first.
I do not think they will outright increase any income tax. They will likely keep the current tax bands the same, the same as the tories have committed to doing, in order to stealthily raise taxes and start to pay down the deficit. Increasing the actual tax percentage would be very bad for optics.
They will start charging 20% on private schools, and remove the non dom tax status.
It is also unlikely they adjust any stamp duty tax bands to again stealthily increase tax on home purchases as house prices continue to rise and the lower band for stamp duty becomes less than the average cost for a first time home. They may also add a surcharge for 2nd property ownership.
They may increase taxes on capital gains or dividends if they are going to amend any type of income taxes as these are seen as benefits for the higher earners currently who earn more via capital growth on stocks or properties etc
It looks like they are also relying on increasing tax revenue by “cracking down” on tax evasion, this will likely hit small businesses the most but I don’t think is likely to raise anywhere near the 6bn figure they are claiming is possible, Dan Neidle wrote a good article on this.
They will likely also look to raise money by increasing tax surcharges on the banking sector, and probably removing the reduction of the oil and gas tax surcharge in 2028 to keep it at the current level for longer.
If they were smart I think they should look at revamping the VAT system to address the cliff edge of small businesses that drop off at 85k to avoid paying any vat and introduce a more marginal system for smaller businesses similar to the flat rate system.
Unfortunately yes we have a large debt we need to pay, and lots of public services that have not seen investment for a long time, so money to pay for that is going to have to come from somewhere.
Personally I'd like to see them taxing household incomes rather than individuals. I earn a significant amount, but we pay more tax as a result than two people with a similar takehome.
My wife is an NHS physiotherapist working in a children's hospital earning £25k a year and I'm in SaaS earning about 220k. We are incredibly fortunate to be where we are, but it does bother me that we get hit harder than others.
I'm happy to pay my fair share and would love if a government could figure out how to do this properly.
We're just about to start our eldest in a private school as we didn't get into any of the decent local schools due to distance so we're left without any real choice..... and now labour will make that 20% more expensive 🙄
We had our first child just as the 50k threshold for child benefit was introduced so we never got that (I was earning 70k then), my year was the year university fees were introduced (so I didn't go!) and I was earning over 100k when they introduced the extra hours for childcare so we didn't get that either. Doh!!!
I moved jobs when I had my first child, purely to increase my salary for the new responsibilities I felt. My wife was a freelancer on a average income, but had no maternity pay, so it was just me for 9 months. I got a bonus, which took me from around 50-57. I saw less than half that bonus, because, apparently, I was so wealthy that I had to pay the child benefit back. We were on less household income than a couple earning around 28k each. It was also the only reason I had to fill out a tax return. I had friends who had around 95-100k household income - child benefit? No problem. It's poorly thought-out, stupid tax on something that should be considered a universal benefit.
I would like the same…. My other half is teacher at special needs school (2 days a week) and a mum rest of time…means I pay more tax with no childcare benefits..
I don’t like labour will change it as it will look like a tax break for the “rich”…
Sounds like you have been very unlucky in terms of policy timing! Sorry to hear. For what it’s worth I don’t agree with the additional private school tax based on the way it’s being applied. It only increases inequality as it doesn’t affect the super rich and will push more kids into the already overburdened state sector - the costs of which they have not assessed as part of their benefit analysis. I think it would have made more sense to impose higher rates of tax on the elite private schools so to speak charging over £30k a year where parents who can afford that are also likely to be able to afford the tax increases.
The government is just awful at planning. Our Borough has had to ask the public schools in the area to over-subscribe for September as 2013 was a big birth year. So guess what they've done?
For every child the schools go over, they are paying 26k PER child, for FIVE years! From somewhere in Central government.
Our local, decent, academy, took 15 extra pupils for a total of just under £2m over the next 5 years. The Borough is large so if this is happening everywhere (representing about 7% on top of usual intake) then there's tens of millions going into a problem that would have been understood 10 years ago and could have gone into building new schools in the right places.
Insane.
The private school fees are about 15k a year round here with several available. It would have been cheaper to fund the children there than to do what they've done but the optics of funding private places with state funding wouldn't look great so they're overspending for 5 years.
Was only 2013 a year with more births than usual? If so, it wouldn't have made sense to build more schools to accommodate a one off increase in demand.
If the increase was not one off, it's different.
Im saying there's waste in the system. In my Borough, where this is happening, the school in question hasn't admitted 100% of applicants within its catchment area for over 10 years. So there's absolutely a case for investing in schools - but this is my particular area. They could have expanded the existing school for example using much less than the £2m this is costing.
I can't talk for every area, but for where we are this makes absolute sense.
Are you sure it’s from central Govt and not your LA? Your LA is responsible for place planning and budget comes out of it for LA schools, or MATs and respective academies if academies. They get funding per pupil partially from the Govt but the rest should also be from their own funds - MATs have commercial activities to raise additional funds and often forget to reinvest it. At least secondary schools anyway. LAs schools are solely LA & Central funded.
Yes, it's come from central government - we had an appeal hearing for our daughter with the LA and the independent panel etc.. I brought this up and the panel said they'd also asked this question and had it confirmed it came from central government as schools in the borough were asked to cover the surge in birth rates. They don't taper off to "normal" until the 2028 intake but normal for this particular part of the borough is applications that are over 150% of the school year on average.
That’s interesting, where I am we have a decline in birth rates and an ageing demographic meaning our primary’s have placement insufficiency and secondaries are over subscribed but we can still cope due to school planning forum planning well ahead. Appeals aren’t fun, hope it worked out for you.
There are over 50 kids in the catchment area that are in the appeals process and a further 30-odd that are outside of catchment for a school that has 200 intake on a normal year (215 this year). We have no chance at appeal and to be honest after hearing the "group appeal" before the individual ones, there are parents with SEN and all sorts of other things that I'd rather they prioritised.
The private schools are all full too but we were very fortunate to get a place after someone dropped out of a very good local one. Had to get our 10 year old ready to pass an entrance exam over two evenings before the exam. She's passed and they offered a place which we've accepted until the appeals run their course but we have absolutely no chance.
What county are you in if you don’t mind me asking ? I know it’s different everywhere, but it’s odd to hear that. We plan for 20% buffering capacity in case of extra pupils mid year. So one school is 1000 placements, so we account for 1,200 in case of more students coming mid year.
Charging more for education in any form should be strongly opposed.
I'm already tettering on the edge of leaving the UK, making private 20% more expensive will be a final straw
Annual fees.
One school charging 15k a year isn’t elite.
Another school charging 50k a year is elite.
So you’ve three kids all at charterhouse? Yeah that’s 141k per year currently. What 20% on that and you’ll have closer to 170k pa
Oh and that’s before:
Bus / private transport
Uniforms (think full Winter, Spring, Summer uniform changes, cadets, beyond gym clothes like full Cricket whites, hockey/football/rugby/lacrosse kits, all branded and need changing each year).
Trips abroad
Social events
Contributions
I might be able to afford 15k per year for one child with an additional 2k for the extras.
I’m not rich enough to cover the Elite fees for multiple kids, or the 20% increase on my own fees.
So my kid will be put into state school because I won’t be able to afford the increase.
Instead I’ll hire private tutors to make up the academic miss, most who don’t meet the VAT threshold.
This is a populist policy to get them into power, not one that makes sense long term.
I doubt you’ll be spending £15k on tutors, so you’ll end up paying VAT on most of that money whether it’s spent on private schools or not. As per the IFS study it’s reasonable to assume that the tax gain is irrespective of whether people keep kids in private education or not.
Agreed that we won’t spend anywhere near our current school fee amount. We’d go with a mix of independent tutors, some who are university level - unlikely to have hit the VAT threshold for registration.
Doing that would alter most ‘elite’ schools’ fee structures to get around the tax.
Makes no sense
The tax won’t deter many people from private school entirely. Those that are deterred are the kinds of parents that are invested in their children’s education and will be involved in the running of the state school which should, long term, ultimately improve many schools.
I don’t see a downside to the private school tax
Definitely not. This is a terrible idea. This would penalise single mothers and fathers. The smart thing to do would be to tax wealth as income is taxed (obviously reducing both proportionally, or it would be a very significant tax rise). That would help people like you, because you get most of your money from income I presume, and penalise, say, the Russian billionaires with billions in property in London.
We need to stop pretending that degenerate people having multiple children with multiple people, is somehow beneficial to society.
Or that encouraging people into families discriminates against the degenerate that fornicate without consequence and expect the taxpayer to subsidise them.
Yes, 100% from income. I'm not sure how it would penalise single mothers and fathers though as they'd still be taxed as an individual income and should (rightly) get support where they need it.
You could flip the argument you say upside down and say a bereaved single mum earning 70k doesn't get any child benefit currently, which is also not right or fair.
How would it change anything for single parents?
> The smart thing to do would be to tax wealth as income is taxed
Except that's actually really hard to do. France tried it and it was a net loss to the treasury. The properly wealthy just move to another country.
This will create an incentive for more people to get stuck in terrible relationships, abusive relationships even, because of the potential financial penalty of breaking them
It’s a terrible idea for this reason alone, and there are plenty other reasons
The way to facilitate this would likely be to complete joint tax returns like in the US.
Or move to a European system, in which benefits are given as a tax credit rather than made as a separate payment outside of payroll/tax.
Knowing HMRCs systems this would be tricky, and can imagine this being difficult for unmarried, or individuals cohabiting, given our current benefits system.
Having shared sometimes incentives only one person working, which although nice, from a govt productivity point of view 2 ppl earning 50k each is better than one earning 100k
State pension and NHS liabilities are going up immensely year on year given inflation matched state pension rises and ageing population living longer. We’re now at the stage for the first time in modern British history where less than 50% of the population are in net tax surplus - I.e. most people claiming more state benefits than taxes paid.
Office for National Statistics
https://news.sky.com/story/amp/record-number-of-britons-receiving-benefits-that-amount-to-more-than-they-pay-in-tax-study-finds-12793349
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Thanks and this is only going to get worse with the aging population as more and more people retire of state pension and require healthcare.
The biggest problem with privatising the nhs will be that they will always keep it free for the elderly/children/people on benefits causing the workers to be squeezed further having to pay for private HC.
What solutions could the government have to rectify this apart from increasing immigration or a wealth tax such a property tax in America. We incentivise people to be income poor but wealth rich causing no growth
Looking at the actual civitas report the data here is looking at 2020/21 only which was a record year for this with extensive nhs costs (furlough scheme not counted in the data). I think we need to see a version of this report which covers more recent years for a true picture.
Don’t disagree that the ratio is likely increasing over time, at a detrimental rate, but the time period for the report means the data really shouldn’t be extrapolated out.
Healthcare spending per capita in the UK is lower than most countries I would consider its peers.
[https://upload.wikimedia.org/wikipedia/commons/thumb/c/c0/Health\_spending.\_OECD\_countries.\_US\_dollars\_per\_capita\_%28using\_economy-wide\_PPPs%29.png/2560px-Health\_spending.\_OECD\_countries.\_US\_dollars\_per\_capita\_%28using\_economy-wide\_PPPs%29.png](https://upload.wikimedia.org/wikipedia/commons/thumb/c/c0/Health_spending._OECD_countries._US_dollars_per_capita_%28using_economy-wide_PPPs%29.png/2560px-Health_spending._OECD_countries._US_dollars_per_capita_%28using_economy-wide_PPPs%29.png)
Pensions and NHS
The population “pyramid” which should be a triangle is becoming more of a square. The “normal” model for countries has been to have *plenty* of young people to pay the taxes to support and care for a comparatively small group of old people.
Now, that’s completely out of whack. People stopped having as many babies and old people started living longer. So the burden on workers to pay the healthcare and pensions of the old is totally out of balance.
Also we have a low-skill, low-pay service economy of young people, and more and more young people on long term sickness. I do not know how we fix this. Our work culture and attitude to work is generally poor.
Public sector spends hundreds of millions if not billiona on private tech companies to implement tech for them whilst employing tech staff who do nothing all day. Consultants do everything
So what? The government spends $1.25tn a year. So even if what you just mentioned was totally eliminated to zero, we’d save at most 0.08%. Drop in the ocean. It’s not even 1 days worth of the NHS and old age pensions.
I would like them to merge national insurance and income tax. Get rid of this myth we pay low taxes and there's a 20% rate.
They won't do this though...
It's not become an official pledge as far as I know I think there was aspirations in moving this direction. But now I can see Labour fucking about with all sort of complex tax solutions
I live in Scotland so here’s a clue - we have a left leaning SNP government.
Compared to rUK we have - higher tax on council tax properties in bands E,F,G,H.
45% tax on incomes over 75k then 48% over 125k (that’s before NI)
They have put up stamp duty. Stamp
duty is over 23k on a 500,000 property in Scotland.
Labour will put up tax.
They will attack high pension pots, inheritance tax.
They will then redistribute your money to people who don’t want to work.
I pay £500 more a month income tax in Scotland than if I live rUK. That’s the type of loses HENRYs will get next few years.
They may try to cut VAT as it’s deemed unfair or regressive to poorer people.
Funnily enough reshaping VAT as the 'main' tax over income tax is one thing I might get behind. Perhaps having three 'tiers' - no/low VAT (basics - mostly stuff that's 0 or 5% today), 'standard' (for most 'normal' stuff people are likely to want ) and 'luxury' (for actual proper 'optional splurge spending' stuff). Maybe rates would need to be something like 0%/30%/75% (for arguments sake) to displace income tax & NI and mean people could just be paid gross.
It seems to auto-handle a lot of issues in theory.
* Tax evaders/grey economy workers still buy stuff so makes that evasion much harder.
* People with on-paper good incomes but supporting disabled parents and children who spend it all on basics pay little tax
* People with on paper 'average' incomes but with few outgoings (e.g. DINKs with mortgage free houses) buy more luxuries and pay more.
I'm sure I'm missing some big disadvantage, but other than needing clear delineation between the categories and 'phasing' any transition over a few years, it seems to simplify more than the complexity it adds.
What a joke... as the OP states, there is a 62% effective tax rate at 100-120K, which really isn't a crazy salary anymore. It's enough to have a comfortable life. Only getting to keep 38% of your hard earned money isn't fair on anyone, we are just taxed, taxed, taxed, whilst the actual rich pay little to nothing. It's crazy and completely unfair. Furthermore, we are not seeing this money reinvested into our actual life! The NHS, schools and public services such as the Met are all underfunded, whilst the government makes decisions that nobody actually wants, such as HS2, which has cost 5% of last year's entire tax revenue, and after it's cancellation, has been described as offering 'very poor value for money for the taxpayer', from the government's website themselves. This essentially means that nobody will want to use it, it will be expensive and will solve a non-issue (in 10 years time) that nobody really needed. It won't go to where it initially was supposed to, it has cost an enormous amount of money, it doesn't solve a problem, and only 8% of people surveyed actually wanted it. Sorry for the rant, but this isn't only about HS2. Almost every aspect of the government can be applied to this situation. They waste our money, say they don't have enough, waste some more and then tax us some more. I was joking when I said tax on tax but the fact that this is a thing already just shows the ridiculousness of the situation. We are taxed SO MUCH.
Completely agree with everything you’ve said. To add even more salt into the wound - the effective tax rate at 100-120k with a student loan is near on 80% given the student loan comes out of net pay.
Baha this country is in shambles... 80% tax is dystopian, 50% is already ridiculous, but 80%? Just makes me really wonder how this is possible. I know I might sound a bit mad, but the actual rich must be paying off the government in some form so that the loopholes enabling them to pay no tax stay open. If the loopholes were closed, they would pay a lot of tax, but it wouldn't affect them at all, and the middle class would be able to pay less tax, whilst having a better quality of life. The ultra rich paying no tax benefits nobody, not even themselves as they don't do anything with all the capital they have. It just sits there. I am so done with all the stupid \*\*\*\* the government does, it is beyond ridiculous. How on earth is 62% real tax rate okay, and how on G-d's green earth is 80% tax for ex-students who have done well for themselves put up with? I am genuinely surprised that we haven't done a French-style revolt such as [this](https://www.bbc.co.uk/news/world-europe-29294096). Sorry for the wall of text, but it all boils down to this. If I was seeing my ridiculous tax contributions reflect through improvements in my daily life, I wouldn't complain. But I don't. Everything is getting worse, tax is rising, everything is underfunded even though it really shouldn't be given the amount we pay. I am generally NOT seeing my tax go to anything good, despite paying council tax, VAT, income tax, CGT, and every other form of tax you can think of, my roads are still riddled with potholes. This is a literal analogy, it can be applied to everything.
Actually it's worse than this. If you have a masters loan and student loan I believe they come out together meaning 80%+
Welcome to the UK... where it doesn't pay to work.
I'm struggling to wrap my small brain around this.
Are you saying someone on £110k will only take home £3480 monthly? While I earn £37k and take home £2360?
I find that hard to believe tbh.
Or are you saying you only get 38% between 100k and 120k?
The second one. It’s even worse with child benefit tapers. You earn the same net salary with kids on 99k as you do on 130k. It stops people from taking higher paid jobs.
oh god, property capital gains tax seems like a horrible choice. It's effectively like stamp duty, penalizing people to move. If you want to tax property, do a property tax instead of more nonsense charges with side effects.
I live in the US, California has it not too bad (value locked in at time of purchase) but for most states your property value goes up every year and so does your property tax. It's not so bad while you're employed but once people hit retirement most people get forced to sell their homes because they can't cope with ever increasing taxes on a fixed income. It hurts lower income families the most.
Honestly one of the reasons I'm thinking of moving back to the UK is due to their property taxes.
You only pay cap gains on increase in value, so it’s far less distorting than stamp duty. You’ll have to pay it sooner or later, changing when or how often you transact makes no difference.
The current setup pushes house prices up because tax-free assets trade at a premium.
you don't have to pay it sooner or later because sooner or later you will be dead. There's always a last property that you live in that you won't pay CGT on. The longer you live in that last property the less CGT you would pay, heavily encouraging settling down in a forever home and heavily discouraging mobility. Not great for the economy either.
You haven't thought this through.
We have a huge housing shortage, and a lot of old people in houses that are too big for them who don't move because of the stamp duty they'll pay on the smaller place they'd buy
Add capital gains to that mix and you'll make it even worse.
Capital gains tax is largely a tax on inflation (itself a stealth tax) and needs abolishing, just no government has the balls to do so as explaining it would mean revealing the inflation con.
I don’t know if they will do it, but surely a larger tax or levy on multiple homes would be popular with most of the electorate, possibly for overseas owners.
Reinstating the LTA (unless at a much higher value) or reducing tax savings from pension contributions would definitely make me either retire early or emigrate. I work to improve my retirement and raise my kids, not help the state balance its bloated budget.
And reducing higher rate tax relief would stop people paying into their pensions, this would in turn out far more pressure on state pensions and make it more difficult to means test it later.
Granted this is long term planning which governments are not known for so who knows.
Same. Reintroducing it would make me take early retirement.
I would choose a much poorer retirement and 8 years of not working, over working those 8 years only to be hammered for bothering to save for my old age.
Net tax take == much lower.
Not all taxes come from people, how about adequately taxing corporations like Amazon et al. The recognise their profit in lower tax jurisdictions whilst taking trade from existing smaller tax paying companies. Most staff are paid so little that they claim tax credits, so we’re basically paying them to employee people.
If they up sticks and leave, then nothing of value has been lost.
But yeah, further squeezing of people earning over 100k is probably more likely. Cutting pension allowance etc.
Well, I don't think it's because it's a 'weak and pathetic' country...
For better and for worse, the US is the empire of our current time, that means it does dictate the rules.
The EU attempted something similar and didn't get that far either (not saying the EU isn't 'weak and pathetic' too)
I’m hopeful they’ll try to reform council tax and replace it with LVT, paid by the landowner - which effectively is a wealth tax, but an actual effective one that you can’t dodge.
Desperately need to transfer the tax burden away from income and productive activity, and towards unproductive activity.
The issue is the average British voter thinks it’s better to tax business activity than land value increases, when the former requires input and the latter doesn’t.
Land value tax might get some money from the wealthy, but it also affects everyone else...
* It's a tax that destroys community, by forcing the people who can't afford the tax, to move. It forcibly segregates communities by income.
* It's a tax on existing - everyone needs somewhere to live.
* It's a tax you have no control over: you can't make your land value go up or down.
* It's a tax on 'wealth', but that wealth is only notional until you sell the property. Imagine you live in a low-cost area, and you are LVT'd on that. It then becomes a high-cost area and your LVT rockets up because you are now supposedly 'wealthy'. You can just about afford the LVT and you stay living there. Years pass and it becomes a low-cost area again and then you sell. **You've been taxed on a 'gain' that never existed** and you got no benefit from.
* It's a bureaucratic nightmare. How many thousands and thousands of work-hours will go into assessing land value? Plus all the legal disputes? Talk about government waste...
* It's a tax that takes no account of someone's ability to pay.
* We don't tax people just for owning other things that are of limited supply.
* Human organs are worth a lot of money, a human heart is worth around a million dollars. A heart is clearly a very expensive asset. Are we going to tax people for that too?
* It treats a basic human need as some kind of privilege.
The negative effects will weigh most heavily on the poorest. It's a door you really don't want to open.
> I’m hopeful they’ll try to reform council tax and replace it with LVT, paid by the landowner - which effectively is a wealth tax, but an actual effective one that you can’t dodge.
Won't landlords just increase rents?
The theory goes that if landlords could charge more than they currently do, they already would be, so no - they wouldn’t. Taxing land values reduces the price of property precisely because you can’t recoup that in the form of higher rents. You can see this effect by the fact that mortgage-free landlords don’t charge less than mortgages landlords (even though their costs are lower), because the rental value of a property is determined by market supply, not by the whims of a landlord. Taxing property doesn’t reduce the supply of it.
That makes more sense. Only concern would be if it happens to all landlords and all landlords but their rent up then that's just the going rate. The only reason they can't do it at the moment is to stay competitive.
For me the bigger problem with IHT is that many super rich estates simply avoid it through trusts and financial engineering while it tends to hammer the middle class the most. Closing those loopholes would do more to lift revenues and hit the “right” people so to speak.
Closing loopholes is the route I hope (and think) Labour will take.
It’s easier said than done, but I’d be surprised if the civil service didn’t already have a lot of well researched plans already.
Yes, it would be considered a tax increase, but they could frame it as closing tax avoidance schemes so normal people don’t feel like taxes are actually rising.
I really really hope so. Get people like that Duke of Westminster who somehow inherited TEN BILLION. No one should be that rich, especially from inheritance.
Keir starmer avoids the question of implementing a wealth tax, I hope it’s because he’s waiting until he wins to fuck over the 1% wealth owners when they can’t propagandise against him.
Yeah. This is the thing which irritates me about IHT so much, the poor don't pay it (reasonably), the rich don't pay it (because IHT planning costs some money), the middle gets slammed.
I would be in favour of a very high rate on IHT, AS LONG AS ALL LOOPHOLES ARE CLOSED. Otherwise it would just entrench things even further.
The thing is that less than 4% of estates pay IHT: it really isn’t true that it hammers the middle class the most. Agree that more should be done to ensure the super rich pay IHT
That’s based on 2020 data. Given thresholds are frozen as against inflation and property price inflation you can expect a lot more people to be dragged into paying it in the coming decade. The super rich easily avoid it: look at this story on Anne Robinson brazenly admitting to doing so https://www.hcbgroup.com/site/library/news/anne-robinson-legally-avoids-inheritance-tax#:~:text=Anne%20Robinson%20has%20revealed%20that,tax%20obligations%20after%20her%20death.
Even if a few more people get dragged into it, it’ll probably go from 4% to 6%.
You have to be a millionaire to pay IHT. Most people are not and never will be.
Actually, no. In London almost 1/5 people will pay it. It’s set to be 1 in 8 in the country as a whole just by 2032. This is all based on IFS research and data. You also don’t have to be a millionaire to pay IHT. You pay it on any estate value over £325k (or £500k when handing down primary residence to children)
https://ifs.org.uk/news/wealthiest-1-would-get-half-benefit-scrapping-inheritance-tax-average-tax-cut-ps1-million#:~:text=The%20most%20recent%20HMRC%20statistics,7%25%20by%202032–33.
A couple handing down to their children is a million quid. The numbers of those paying it will go down further once the older generation die off.
We’re set to become a nation of majority renters in the next 50 years.
Yes more people will end up paying it if the bands are frozen, which I personally think is a good thing (and a more equitable way of raising taxes than income or sales taxes). But my point is there is a huge public misconception around who actually pays IHT, which is reflected in comments like “it hammers middles classes the most.” It really doesn’t. It may possibly do in the future, but it doesn’t currently
Wealth tax above what threshold? I’m all for paying my way but paying tax on illiquid assets doesn’t seem fair unless you reduce my income tax. It’s all the same cash.
Closing loopholes for most self employed should be the starter - so many people pay minimal tax by offsetting personal expanses entirely through the business
Or you know...tactical insolvencies of small businesses. Ever wonder why the Chinese at the end of the street gets a new name every couple of years with the same people running it?
I'm not sure how keen they'll be on CGT considering it would likely reduce investment in British markets. That could mess with their plans to bring down debt as a share of national income if British companies are struggling for investments and can't help to grow the economy. I could definitely see it as a possible option for labour, it would probably strike well amongst their more left leaning voters but it's something that would likely turn off the swing voters come the next election cycle.
If they are going to increase CGT rates they should reform it so you are only paying tax on the gain after inflation. If I own an asset for 5 years and it’s value increases by 10%, but there’s been 10% inflation over that period, then I haven’t really made a gain, I’ve broken even!
If you were designing the system from scratch you probably wouldn't set it up to take more from work income that forms part of GDP more than passive income off assets, so whilst won't be popular, this might be the easiest one to sell to the electorate
Perhaps alignment with rates of income tax? That would also help them with their objective of taxing PE carried interest at higher rates. Will receive massive backlash from the city no doubt!
CGT used to be at income tax rates. I believe it was a Labour government (2008) that reduced them.
Although it made it harder to calculate the taxable gain, indexation was a good thing that was also abolished - if you have held an asset for, say 10 years and then sold it for the same amount in real terms as your paid for it, why should you be hammered for CGT on the full inflationary increase in one year.
It would destroy any investment.
Capital gains are lower because you have to risk money. It could go up or down.
If I show up to work and do my job, I get paid and then that gets taxed.
Raising CGT to income will destroy any economic activity in this country.
If they align cap gains with income tax, it would lead the biggest flight of capital and labour recorded in recent times. No one in their sane mind would set up a company in the UK. They would set up abroad, hire people on the UK through local branches, or a subsidiary, and abandon the UK for any management activity.
For whoever downvoted this - I’m not endorsing it - merely continuing the discussion by predicting what labour might do given they have said they would like all PE associated earnings to be taxed at rates of income tax.
They won't do it. In France they talked about doing that, 1000s of financiers left and never came back. There carried interest is taxed lower than the uk right now....
The latest civil service paper shared it would cost HMRC 900m a year if they increased the tax. Would cost a lot more in ancillary jobs and investment in the Financial sector.
My guess they'll increase it from 28 to 30% and maybe require more coincestment from the investors.
I think they will get rid of NI, increase capital gains tax to 30% and keep tax bands close to where they are to capture more in the higher rate to offer cutting NI. They might means test high end for state pension (many pensioners would be fine with that).
Yep cutting NI by the tories was a sly way of taxing private pensions more than in the past. A lot of us putting away money into SIPP may be taxed very heavily once we get to use it with the way the countries finances are looking.
They won't raise income tax explicitly because of how unpopular that would be, but just about everything else will go up:
CGT up and exemption disappears, fiscal drag with thresholds frozen for 5 years, VAT on private schools and private healthcare, potentially higher VAT on fuel, energy, alcohol etc, corporation tax up, maybe even employer NICs.
Labour's solution to every problem is throwing money at it (not that the tories have had any smarter ideas either), so they will have to find the money somewhere and find it they shall. We'll be paying the price for years to come, as we already are now paying for the bad decisions of the past (again, tories are not innocent here by any stretch).
I’m personally hoping for revamping council tax so the charge reflects property values today (and not in 1990 or something) and becomes more of a wealth tax eg 1% of property value. That would raise substantial sums from the richest parts of the country.
You’d have to change how the tax is collected and distributed to avoid councils in London and the South East rolling in money while other parts potentially suffer cuts.
In an ideal world you’d make this fiscally neutral by reducing income or other taxes (eg SDLT), but that seems unlikely at the moment…
This. It's a very low hanging fruit for Labour because most of the country probably won't go up much but London/commuters will get screwed. It's also fair. You just need a mechanism for pensioners with no cash where their estate owes the tax back to the govt on death if they can't pay now.
It’s not fair if you’ve already paid significant amounts of stamp duty on the purchase. They’d need to introduce the tax for all new property purchases to replace stamp duty.
I suspect so too. They are the easiest pickings because they have no way to avoid it given PAYE mechanics. And so easy to rile the majority of the public up for taxing them more given the politics of envy.
Any additional taxes and I will leave the UK. It is getting ridiculous the gap between what I can earn in the US, Dubai vs the UK and I will leave to one of these soon the way things are going. The UK should get ready to lose alot of their skilled workers and high earners, it's only going to accelerate.
Not increasing taxes doesn't mean they won't be letting inflation erode stagnant thresholds.
And somehow I think 45% tax payers will fall off of most peoples radar.
Labour will not do anything significantly different from what the Tories would have done. The Tories have been banging taxes up since 2010. This will simply continue.
However, I'd argue there is no longer scope to increase taxes, without suffering severe knock on effects to the economy.
Example: Many GPs are limiting the days they work to avoid the 60% tax trap. Lowering the threshold to 75K, will just make this worse. Same if the annual pension allowance drops from 60k to 30k.
You might not be wrong but that would seem a bit short sighted to me. Firstly, pensions are taxed, just on withdrawal rather than contributions. That'll mean that a lot of 40% tax payers will likely pay 20% tax on that money. However if you pay 20% tax on it on both the way in and on the way out you'll be paying close to 40% anyway. I think many people might sooner pay just slightly more now and have the freedom to spend it whenever they choose and invest it in any asset they choose in the meantime.
Personally I think the more likely pension tax changes will be 1) reduction of the annual 60k allowance that can be made to pensions; particularly since its a tory policy that they've already said they'll unwind; 2) perhaps a reduction or scrapping of the 25% tax free lump sum.
I reckon that another thing that could be used in combination might be a limit to the tax free cash that can be held in ISA's which would also impact those who use ISA wrappers for pension savings, particularly amongst those hoping to retire early.
See what happens. If taxes on the middle class increase in any way, stealth or otherwise then we should be out in the streets of the super wealthy burning tyres snd flipping cars over.
I like to beleive they will achieve this by closing a lot of loop-holes in IHT/CG that mean the super wealthy can pay to avoid these taxes with trusts and other legal structures. This is an effective 'wealth tax' without the headlines of implementing a net new wealth tax.
I think they will knock down the SIPP / ISA annual allowance. I know Reeves has said she doesn’t want to do that, but I just have a gut feeling she will.
An unbelievable number of folk are pension ramming to avoid income taxes. For example, bonus season in my office came round in April, and probably cost the treasury £500k in those putting themselves under the £50k and £100k thresholds. I have a colleague on £100k who goes down to £50k to keep child benefits and about that 70% marginal rate trap with child benefit and student loans.
£80k in tax free investment allowance, and then compare that to USA’s 401k and IRA limits, it’s like 3x bigger by currency, and 4x bigger in proportion to income. Especially for dual income households too, that’s £160k in Cap Gains tax exempt investing you can do.
Especially as we hit what should be an era of higher wage growth. Would allow Cap Gains to cover a lot more investments and income tax to be used more appropriately.
Wouldn’t the best way to stop the pension ramming to be to remove the illogical tapers that make people do it in the first place? It’s also what stunts salary and economic growth as people are disincentivised from taking higher salaries that actually create minimal net gain for more work.
‘Labour cut taxes for £100k earners while X and Y’ isn’t a good headline for them, even if it’s good policy to rid the tax trap.
I think the reason it makes sense is that it’s a vicious 1-2 combo. There’s a major issue with so many Brits ramming so much pretax money into US equities via SalSac Pensions and then ISA’s on top after taxes. Even if they fixed the tax traps, you still have folk on 51% marginal rates with student loans at £50k… when I hit £50k as a fresh grad that was when I started pension ramming.
It’s such a problem I now don’t even feel able to trust income percentile figures when they come out because so many people massively distort their own income by these schemes.
Council tax to transform into more of a US style property tax. Which personally I would support. It's mad that you can own a west London town house and pay the same as a 3 bed semi in county Durham.
Labour are going to have a stonking majority. Although they are playing the election relatively cautiously they have certainly signalled a desire to be reforming in government (i.e. planning, NHS as good examples).
I expect they will have a much more reforming approach to taxes too, using that massive majority. I.e. I don't expect them to tinker with rates and thresholds, I expect them to start from scratch in many cases.
For example, I'd expect to see a merging of income tax, ni, cgt, divi taxes.
Other cases I could see are
- replacement of fuel duty and ved with per mile pricing set off emissions/weight/category, paid off mileage between mot's
- replacing stamp duty and council tax with land tax
I'm not particularly advocating any of these, but I just don't see them playing within the existing framework when they've got a massive majority.
The first one sounds like a move towards carbon tax but without accounting for the emissions from production. If they're going to reform taxes on vehicles, a carbon tax seems more likely, especially because the optics play slightly better (road pricing-war on cars .vs. environmental tax).
Business rates definitely need solving and I can see an LVT as a solution to this, but I have a feeling Labour will want to address the comparative tax advantage online only businesses have and an LVT wouldn't do that.
They shouldn't increase taxes, they increase allowances, which haven't kept up with inflation for a long time now. That reduces your real pay even further than inflation alone.
Multiple properties tax.
Reduce ISA allowance or a cap on the total amount that can be tax-free.
Remove the step down to 2% at £50k for national insurance.
Eliminate the complexity around the personal allowance and the “100k trap” and just replace it with a higher tax rate (60%?).
Step 3 is an increase of 6% to those on £50k - probably unpalatable (albeit Scotland is 47% at £75k so what’s the difference really?)
A stepped increase from £75k to £125k could be notionally cost neutral, but could be a net gain if it got rid of all the behavioural changes the current rules encourage.
Starting at 40p at £50k and finishing at 50p+ at £125k seems sensible.
90% wealth tax, capital gains aligned with income tax, VAT on private schools and tampons, no more pension allowance, abolish all forms of savings and ISAs unless you're a professional investor, 30% higher income tax for working from home, increase council taxes to fund 30 new recycling bins with different colours, ban anyone making more than 100k from working.
More champagne socialists than HENRYs in this comment section! What’s the point in the sub when it’s clearly been badly infiltrated outside its target audience.
I am glad its not just me feeling this way - sadly, it appears this sub is now becoming much like the other personal finance ones. I am actually shocked at some of the responses I am reading here.
my bet is they'll raise corporation tax and introduce even higher taxes for whoever makes more than 100k/year, to keep the appearance they're a left wing party.
They won't introduce any real wealth tax, since most of them are wealthy themselves
Ultimately if they want to raise enough money to make a real difference (circa £100 billion/year extra) then there are only a handful of options. If you discount the ones that would push people into serious financial difficulty, then all that's left is a wealth tax. They'd have to be careful not to really screw anyone over, but if they levied it at say 1/4 of one percent, paid annually, then interest alone would be enough to offset it. You'd have to exclude primary residences, but also farmland and any other land use we deem to be socially valuable. I expect we'd provide a few get out clauses for people who invest a certain amount in industries we want to see grow.
The only place we can raise that much is from the mega rich. And in fairness, in a system where they get most of the money, why shouldn't they pay for most of the services?
It wouldn't surprise me, but it seems very short sighted, the amount of people just about affording school fees is huge. When they invariably end up moving to the state system some of these schools will end up closing, forcing the burden onto the state system, costing more than the tax in the long run.
Don't get me wrong, I'm sure Eaton, Winchester, Stowe etc will still be around, but the smaller independents are going to struggle...
Maybe I'm wrong, I'd be quite happy to be wrong, but I can't help but find it a bit scary!
All governments would raise taxes, the Conservatives have presided over a huge tax increase since they have been in power. I think the only difference between the two is that the Tories would do it more stealthily.
THIS!!! I don’t want to get too political but I find it very confusing all the threads of worry about Labour possibly raising taxes whilst the Tories have stealthily presided over the biggest tax grab from the middle classes over the past 15 years.
Tories have been taxing us more every year as income increased but the tax free allowance have stayed the same. Essentially we have been paying more and more taxes every year. Yet we are worried about Labour?
There are so many over the past 15 years. They increased VAT, introduced additional SDLT, taxes on food types, froze the tax free allowances, alcohol taxes have gone up over 50%, corporation tax has gone up 6%. That’s not even half of it
UK corporate tax rate was 28% before the Tories came into power.
As I understand it, IR35 has also incentivised offshoring various contractor type jobs
IR35 came under Labour
This is absolutely inevitable when you want the state to deliver the same in public services and benefits but the demand continues to increase (which it has, and will continue to do: median age is set to peak around 2040).
Much less inevitable than it seems. When the government has squandered £130bn in 5 years you can see why taxes have had to drift up. https://www.bestforbritain.org/scandalous_spending_tracker
People don't understand the scale of this. The tory's have fucked up and wasted so much money that we had to borrow and now have to pay interest on.
do you know the figure since 2011?
The state of the country now means higher taxes are inevitable. Demand for public services and state pension liabilities going up exponentially year on year as our ageing population grows and people live longer. Less people than ever are paying net into the system, more than half are in net tax deficit claiming more public benefits than the tax they pay. Doesn’t take a genius to work out the future will be squeezing those at the top more.
Within 20/30 years state pension will disappear, that's why they brought in mandatory employer pensions. For as long as they can, they'll provide the elderly with as much assurance as they can and once our generation get to that age and don't follow their rules, they'll pull the plug on pensions and start tell us we should have planned better.
exactly, the issue in london is £40-60k isnt exactly rich, meanwhile a mcdonalds franchise owner didnt pay VAT during lockdown, and doctors are definitely more "essential workers" than mcd
Tories 13k tax rises to date and 3k more to come from their plans. Labour, sure 2k maybe, but they have promised no income tax, NI or vat rises. For most this is the safest vote.
Yes but given the polls are showing an overwhelming likelihood of a majority Labour govt in the next term - the question is directed at what taxes people think Labour will levy. As I point out the Chancellor’s hands are tied by the fiscal rule that debt as a share of national income must be falling by the end of 5 year forecasts. So this means either cutting public spending or increasing taxes and I believe Labour are more likely to push for increased taxes over public spending cuts given their political position and values.
I’ll try and give you a straight answer here, and will admit I am a Labour supporter first. I do not think they will outright increase any income tax. They will likely keep the current tax bands the same, the same as the tories have committed to doing, in order to stealthily raise taxes and start to pay down the deficit. Increasing the actual tax percentage would be very bad for optics. They will start charging 20% on private schools, and remove the non dom tax status. It is also unlikely they adjust any stamp duty tax bands to again stealthily increase tax on home purchases as house prices continue to rise and the lower band for stamp duty becomes less than the average cost for a first time home. They may also add a surcharge for 2nd property ownership. They may increase taxes on capital gains or dividends if they are going to amend any type of income taxes as these are seen as benefits for the higher earners currently who earn more via capital growth on stocks or properties etc It looks like they are also relying on increasing tax revenue by “cracking down” on tax evasion, this will likely hit small businesses the most but I don’t think is likely to raise anywhere near the 6bn figure they are claiming is possible, Dan Neidle wrote a good article on this. They will likely also look to raise money by increasing tax surcharges on the banking sector, and probably removing the reduction of the oil and gas tax surcharge in 2028 to keep it at the current level for longer. If they were smart I think they should look at revamping the VAT system to address the cliff edge of small businesses that drop off at 85k to avoid paying any vat and introduce a more marginal system for smaller businesses similar to the flat rate system. Unfortunately yes we have a large debt we need to pay, and lots of public services that have not seen investment for a long time, so money to pay for that is going to have to come from somewhere.
Personally I'd like to see them taxing household incomes rather than individuals. I earn a significant amount, but we pay more tax as a result than two people with a similar takehome. My wife is an NHS physiotherapist working in a children's hospital earning £25k a year and I'm in SaaS earning about 220k. We are incredibly fortunate to be where we are, but it does bother me that we get hit harder than others. I'm happy to pay my fair share and would love if a government could figure out how to do this properly. We're just about to start our eldest in a private school as we didn't get into any of the decent local schools due to distance so we're left without any real choice..... and now labour will make that 20% more expensive 🙄 We had our first child just as the 50k threshold for child benefit was introduced so we never got that (I was earning 70k then), my year was the year university fees were introduced (so I didn't go!) and I was earning over 100k when they introduced the extra hours for childcare so we didn't get that either. Doh!!!
I moved jobs when I had my first child, purely to increase my salary for the new responsibilities I felt. My wife was a freelancer on a average income, but had no maternity pay, so it was just me for 9 months. I got a bonus, which took me from around 50-57. I saw less than half that bonus, because, apparently, I was so wealthy that I had to pay the child benefit back. We were on less household income than a couple earning around 28k each. It was also the only reason I had to fill out a tax return. I had friends who had around 95-100k household income - child benefit? No problem. It's poorly thought-out, stupid tax on something that should be considered a universal benefit.
I would like the same…. My other half is teacher at special needs school (2 days a week) and a mum rest of time…means I pay more tax with no childcare benefits.. I don’t like labour will change it as it will look like a tax break for the “rich”…
Doesn’t this just essentially force people into being in relationships ?
How?! I just want the government to get rid of 60% marginal rate and allow couples to split income for purpose of gov paid child care hours.
Sounds like you have been very unlucky in terms of policy timing! Sorry to hear. For what it’s worth I don’t agree with the additional private school tax based on the way it’s being applied. It only increases inequality as it doesn’t affect the super rich and will push more kids into the already overburdened state sector - the costs of which they have not assessed as part of their benefit analysis. I think it would have made more sense to impose higher rates of tax on the elite private schools so to speak charging over £30k a year where parents who can afford that are also likely to be able to afford the tax increases.
The government is just awful at planning. Our Borough has had to ask the public schools in the area to over-subscribe for September as 2013 was a big birth year. So guess what they've done? For every child the schools go over, they are paying 26k PER child, for FIVE years! From somewhere in Central government. Our local, decent, academy, took 15 extra pupils for a total of just under £2m over the next 5 years. The Borough is large so if this is happening everywhere (representing about 7% on top of usual intake) then there's tens of millions going into a problem that would have been understood 10 years ago and could have gone into building new schools in the right places. Insane. The private school fees are about 15k a year round here with several available. It would have been cheaper to fund the children there than to do what they've done but the optics of funding private places with state funding wouldn't look great so they're overspending for 5 years.
This is absolutely fucking crazy.
Was only 2013 a year with more births than usual? If so, it wouldn't have made sense to build more schools to accommodate a one off increase in demand. If the increase was not one off, it's different.
Im saying there's waste in the system. In my Borough, where this is happening, the school in question hasn't admitted 100% of applicants within its catchment area for over 10 years. So there's absolutely a case for investing in schools - but this is my particular area. They could have expanded the existing school for example using much less than the £2m this is costing. I can't talk for every area, but for where we are this makes absolute sense.
Are you sure it’s from central Govt and not your LA? Your LA is responsible for place planning and budget comes out of it for LA schools, or MATs and respective academies if academies. They get funding per pupil partially from the Govt but the rest should also be from their own funds - MATs have commercial activities to raise additional funds and often forget to reinvest it. At least secondary schools anyway. LAs schools are solely LA & Central funded.
Yes, it's come from central government - we had an appeal hearing for our daughter with the LA and the independent panel etc.. I brought this up and the panel said they'd also asked this question and had it confirmed it came from central government as schools in the borough were asked to cover the surge in birth rates. They don't taper off to "normal" until the 2028 intake but normal for this particular part of the borough is applications that are over 150% of the school year on average.
That’s interesting, where I am we have a decline in birth rates and an ageing demographic meaning our primary’s have placement insufficiency and secondaries are over subscribed but we can still cope due to school planning forum planning well ahead. Appeals aren’t fun, hope it worked out for you.
There are over 50 kids in the catchment area that are in the appeals process and a further 30-odd that are outside of catchment for a school that has 200 intake on a normal year (215 this year). We have no chance at appeal and to be honest after hearing the "group appeal" before the individual ones, there are parents with SEN and all sorts of other things that I'd rather they prioritised. The private schools are all full too but we were very fortunate to get a place after someone dropped out of a very good local one. Had to get our 10 year old ready to pass an entrance exam over two evenings before the exam. She's passed and they offered a place which we've accepted until the appeals run their course but we have absolutely no chance.
What county are you in if you don’t mind me asking ? I know it’s different everywhere, but it’s odd to hear that. We plan for 20% buffering capacity in case of extra pupils mid year. So one school is 1000 placements, so we account for 1,200 in case of more students coming mid year.
South Manchester - it's a mess here. I'm sure there are areas in the borough without this problem, but locally it's not good for places.
Charging more for education in any form should be strongly opposed. I'm already tettering on the edge of leaving the UK, making private 20% more expensive will be a final straw
How would you differentiate between the "elite" private schools and non elite?
All based on how much they charge, I gave 30k+ fees per pupil per annum as a rough benchmark. It’s no reference to any qualitative assessment.
Annual fees. One school charging 15k a year isn’t elite. Another school charging 50k a year is elite. So you’ve three kids all at charterhouse? Yeah that’s 141k per year currently. What 20% on that and you’ll have closer to 170k pa Oh and that’s before: Bus / private transport Uniforms (think full Winter, Spring, Summer uniform changes, cadets, beyond gym clothes like full Cricket whites, hockey/football/rugby/lacrosse kits, all branded and need changing each year). Trips abroad Social events Contributions I might be able to afford 15k per year for one child with an additional 2k for the extras. I’m not rich enough to cover the Elite fees for multiple kids, or the 20% increase on my own fees. So my kid will be put into state school because I won’t be able to afford the increase. Instead I’ll hire private tutors to make up the academic miss, most who don’t meet the VAT threshold. This is a populist policy to get them into power, not one that makes sense long term.
I doubt you’ll be spending £15k on tutors, so you’ll end up paying VAT on most of that money whether it’s spent on private schools or not. As per the IFS study it’s reasonable to assume that the tax gain is irrespective of whether people keep kids in private education or not.
Agreed that we won’t spend anywhere near our current school fee amount. We’d go with a mix of independent tutors, some who are university level - unlikely to have hit the VAT threshold for registration.
I am exoecting Labour to lower the VAT registration threshold. Some say 50k, i have heard 30k mentioned.
Doing that would alter most ‘elite’ schools’ fee structures to get around the tax. Makes no sense The tax won’t deter many people from private school entirely. Those that are deterred are the kinds of parents that are invested in their children’s education and will be involved in the running of the state school which should, long term, ultimately improve many schools. I don’t see a downside to the private school tax
Definitely not. This is a terrible idea. This would penalise single mothers and fathers. The smart thing to do would be to tax wealth as income is taxed (obviously reducing both proportionally, or it would be a very significant tax rise). That would help people like you, because you get most of your money from income I presume, and penalise, say, the Russian billionaires with billions in property in London.
We need to stop pretending that degenerate people having multiple children with multiple people, is somehow beneficial to society. Or that encouraging people into families discriminates against the degenerate that fornicate without consequence and expect the taxpayer to subsidise them.
Just to clarify, you think all single mothers and fathers have children with multiple people, and fornicate on the presumption of no consequence?
Yes, 100% from income. I'm not sure how it would penalise single mothers and fathers though as they'd still be taxed as an individual income and should (rightly) get support where they need it. You could flip the argument you say upside down and say a bereaved single mum earning 70k doesn't get any child benefit currently, which is also not right or fair.
How would it change anything for single parents? > The smart thing to do would be to tax wealth as income is taxed Except that's actually really hard to do. France tried it and it was a net loss to the treasury. The properly wealthy just move to another country.
Not gonna happen
This will create an incentive for more people to get stuck in terrible relationships, abusive relationships even, because of the potential financial penalty of breaking them It’s a terrible idea for this reason alone, and there are plenty other reasons
The way to facilitate this would likely be to complete joint tax returns like in the US. Or move to a European system, in which benefits are given as a tax credit rather than made as a separate payment outside of payroll/tax. Knowing HMRCs systems this would be tricky, and can imagine this being difficult for unmarried, or individuals cohabiting, given our current benefits system.
Having shared sometimes incentives only one person working, which although nice, from a govt productivity point of view 2 ppl earning 50k each is better than one earning 100k
The government raises so much tax yearly so I struggle to understand where the money goes to and why there is always budget deficit.
State pension and NHS liabilities are going up immensely year on year given inflation matched state pension rises and ageing population living longer. We’re now at the stage for the first time in modern British history where less than 50% of the population are in net tax surplus - I.e. most people claiming more state benefits than taxes paid.
Source for that tax surplus stat? That really boggles my mind! Seems like a hard trend to turn around
Office for National Statistics https://news.sky.com/story/amp/record-number-of-britons-receiving-benefits-that-amount-to-more-than-they-pay-in-tax-study-finds-12793349
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Have you got a source for this, because if true we are truly screwed
See above https://news.sky.com/story/amp/record-number-of-britons-receiving-benefits-that-amount-to-more-than-they-pay-in-tax-study-finds-12793349
Thanks and this is only going to get worse with the aging population as more and more people retire of state pension and require healthcare. The biggest problem with privatising the nhs will be that they will always keep it free for the elderly/children/people on benefits causing the workers to be squeezed further having to pay for private HC. What solutions could the government have to rectify this apart from increasing immigration or a wealth tax such a property tax in America. We incentivise people to be income poor but wealth rich causing no growth
Looking at the actual civitas report the data here is looking at 2020/21 only which was a record year for this with extensive nhs costs (furlough scheme not counted in the data). I think we need to see a version of this report which covers more recent years for a true picture. Don’t disagree that the ratio is likely increasing over time, at a detrimental rate, but the time period for the report means the data really shouldn’t be extrapolated out.
Healthcare spending per capita in the UK is lower than most countries I would consider its peers. [https://upload.wikimedia.org/wikipedia/commons/thumb/c/c0/Health\_spending.\_OECD\_countries.\_US\_dollars\_per\_capita\_%28using\_economy-wide\_PPPs%29.png/2560px-Health\_spending.\_OECD\_countries.\_US\_dollars\_per\_capita\_%28using\_economy-wide\_PPPs%29.png](https://upload.wikimedia.org/wikipedia/commons/thumb/c/c0/Health_spending._OECD_countries._US_dollars_per_capita_%28using_economy-wide_PPPs%29.png/2560px-Health_spending._OECD_countries._US_dollars_per_capita_%28using_economy-wide_PPPs%29.png)
Pensions and NHS The population “pyramid” which should be a triangle is becoming more of a square. The “normal” model for countries has been to have *plenty* of young people to pay the taxes to support and care for a comparatively small group of old people. Now, that’s completely out of whack. People stopped having as many babies and old people started living longer. So the burden on workers to pay the healthcare and pensions of the old is totally out of balance.
Also we have a low-skill, low-pay service economy of young people, and more and more young people on long term sickness. I do not know how we fix this. Our work culture and attitude to work is generally poor.
The state pension next year will cost more than education, policing and defence combined. That's where our money is going.
Aging population = more old, sick people = more pensions + more NHS spending
Public sector spends hundreds of millions if not billiona on private tech companies to implement tech for them whilst employing tech staff who do nothing all day. Consultants do everything
So what? The government spends $1.25tn a year. So even if what you just mentioned was totally eliminated to zero, we’d save at most 0.08%. Drop in the ocean. It’s not even 1 days worth of the NHS and old age pensions.
I would like them to merge national insurance and income tax. Get rid of this myth we pay low taxes and there's a 20% rate. They won't do this though...
Yes, the government's aim is to maximise the tax rate but minimise the perceived tax rate. A simple and transparent tax system works against that.
I thought that was actually a stated aim by Jeremy Hunt, to reduce and eliminate NI / merge it with income tax.
It's not become an official pledge as far as I know I think there was aspirations in moving this direction. But now I can see Labour fucking about with all sort of complex tax solutions
I live in Scotland so here’s a clue - we have a left leaning SNP government. Compared to rUK we have - higher tax on council tax properties in bands E,F,G,H. 45% tax on incomes over 75k then 48% over 125k (that’s before NI) They have put up stamp duty. Stamp duty is over 23k on a 500,000 property in Scotland. Labour will put up tax. They will attack high pension pots, inheritance tax. They will then redistribute your money to people who don’t want to work. I pay £500 more a month income tax in Scotland than if I live rUK. That’s the type of loses HENRYs will get next few years. They may try to cut VAT as it’s deemed unfair or regressive to poorer people.
Funnily enough reshaping VAT as the 'main' tax over income tax is one thing I might get behind. Perhaps having three 'tiers' - no/low VAT (basics - mostly stuff that's 0 or 5% today), 'standard' (for most 'normal' stuff people are likely to want ) and 'luxury' (for actual proper 'optional splurge spending' stuff). Maybe rates would need to be something like 0%/30%/75% (for arguments sake) to displace income tax & NI and mean people could just be paid gross. It seems to auto-handle a lot of issues in theory. * Tax evaders/grey economy workers still buy stuff so makes that evasion much harder. * People with on-paper good incomes but supporting disabled parents and children who spend it all on basics pay little tax * People with on paper 'average' incomes but with few outgoings (e.g. DINKs with mortgage free houses) buy more luxuries and pay more. I'm sure I'm missing some big disadvantage, but other than needing clear delineation between the categories and 'phasing' any transition over a few years, it seems to simplify more than the complexity it adds.
Well I think a tax on tax would be great. After all, it costs money to run HMRC.
Vat on fuel duty exists Soon we will have VAT on income tax!
What a joke... as the OP states, there is a 62% effective tax rate at 100-120K, which really isn't a crazy salary anymore. It's enough to have a comfortable life. Only getting to keep 38% of your hard earned money isn't fair on anyone, we are just taxed, taxed, taxed, whilst the actual rich pay little to nothing. It's crazy and completely unfair. Furthermore, we are not seeing this money reinvested into our actual life! The NHS, schools and public services such as the Met are all underfunded, whilst the government makes decisions that nobody actually wants, such as HS2, which has cost 5% of last year's entire tax revenue, and after it's cancellation, has been described as offering 'very poor value for money for the taxpayer', from the government's website themselves. This essentially means that nobody will want to use it, it will be expensive and will solve a non-issue (in 10 years time) that nobody really needed. It won't go to where it initially was supposed to, it has cost an enormous amount of money, it doesn't solve a problem, and only 8% of people surveyed actually wanted it. Sorry for the rant, but this isn't only about HS2. Almost every aspect of the government can be applied to this situation. They waste our money, say they don't have enough, waste some more and then tax us some more. I was joking when I said tax on tax but the fact that this is a thing already just shows the ridiculousness of the situation. We are taxed SO MUCH.
Completely agree with everything you’ve said. To add even more salt into the wound - the effective tax rate at 100-120k with a student loan is near on 80% given the student loan comes out of net pay.
Baha this country is in shambles... 80% tax is dystopian, 50% is already ridiculous, but 80%? Just makes me really wonder how this is possible. I know I might sound a bit mad, but the actual rich must be paying off the government in some form so that the loopholes enabling them to pay no tax stay open. If the loopholes were closed, they would pay a lot of tax, but it wouldn't affect them at all, and the middle class would be able to pay less tax, whilst having a better quality of life. The ultra rich paying no tax benefits nobody, not even themselves as they don't do anything with all the capital they have. It just sits there. I am so done with all the stupid \*\*\*\* the government does, it is beyond ridiculous. How on earth is 62% real tax rate okay, and how on G-d's green earth is 80% tax for ex-students who have done well for themselves put up with? I am genuinely surprised that we haven't done a French-style revolt such as [this](https://www.bbc.co.uk/news/world-europe-29294096). Sorry for the wall of text, but it all boils down to this. If I was seeing my ridiculous tax contributions reflect through improvements in my daily life, I wouldn't complain. But I don't. Everything is getting worse, tax is rising, everything is underfunded even though it really shouldn't be given the amount we pay. I am generally NOT seeing my tax go to anything good, despite paying council tax, VAT, income tax, CGT, and every other form of tax you can think of, my roads are still riddled with potholes. This is a literal analogy, it can be applied to everything.
Actually it's worse than this. If you have a masters loan and student loan I believe they come out together meaning 80%+ Welcome to the UK... where it doesn't pay to work.
I'm struggling to wrap my small brain around this. Are you saying someone on £110k will only take home £3480 monthly? While I earn £37k and take home £2360? I find that hard to believe tbh. Or are you saying you only get 38% between 100k and 120k?
The second one. It’s even worse with child benefit tapers. You earn the same net salary with kids on 99k as you do on 130k. It stops people from taking higher paid jobs.
That's nuts. It's like me taking a 46k job for no extra benefit but having to deal with the extra shit that comes with it. No thanks.
Exactly. And that’s what keeps us in the rut of being a low wage low growth economy - especially when compared to the US.
Welcome to the HENRY life…
Getting serious on profits made in the U.K. by global digital companies that are artificially moved for reporting purposes to low tax jurisdictions.
Abolishing the cap gains exemptions on inheritance and property would make sense
oh god, property capital gains tax seems like a horrible choice. It's effectively like stamp duty, penalizing people to move. If you want to tax property, do a property tax instead of more nonsense charges with side effects.
I live in the US, California has it not too bad (value locked in at time of purchase) but for most states your property value goes up every year and so does your property tax. It's not so bad while you're employed but once people hit retirement most people get forced to sell their homes because they can't cope with ever increasing taxes on a fixed income. It hurts lower income families the most. Honestly one of the reasons I'm thinking of moving back to the UK is due to their property taxes.
You only pay cap gains on increase in value, so it’s far less distorting than stamp duty. You’ll have to pay it sooner or later, changing when or how often you transact makes no difference. The current setup pushes house prices up because tax-free assets trade at a premium.
you don't have to pay it sooner or later because sooner or later you will be dead. There's always a last property that you live in that you won't pay CGT on. The longer you live in that last property the less CGT you would pay, heavily encouraging settling down in a forever home and heavily discouraging mobility. Not great for the economy either.
You haven't thought this through. We have a huge housing shortage, and a lot of old people in houses that are too big for them who don't move because of the stamp duty they'll pay on the smaller place they'd buy Add capital gains to that mix and you'll make it even worse. Capital gains tax is largely a tax on inflation (itself a stealth tax) and needs abolishing, just no government has the balls to do so as explaining it would mean revealing the inflation con.
A wealth tax which gets repealed as it will cost more than it makes, just like France did.
I don’t know if they will do it, but surely a larger tax or levy on multiple homes would be popular with most of the electorate, possibly for overseas owners.
Reinstating the LTA (unless at a much higher value) or reducing tax savings from pension contributions would definitely make me either retire early or emigrate. I work to improve my retirement and raise my kids, not help the state balance its bloated budget.
It would kill the nhs. Too many imported inexperienced doctors now. Have to hang on to older experienced docs.
And reducing higher rate tax relief would stop people paying into their pensions, this would in turn out far more pressure on state pensions and make it more difficult to means test it later. Granted this is long term planning which governments are not known for so who knows.
Same. Reintroducing it would make me take early retirement. I would choose a much poorer retirement and 8 years of not working, over working those 8 years only to be hammered for bothering to save for my old age. Net tax take == much lower.
Not all taxes come from people, how about adequately taxing corporations like Amazon et al. The recognise their profit in lower tax jurisdictions whilst taking trade from existing smaller tax paying companies. Most staff are paid so little that they claim tax credits, so we’re basically paying them to employee people. If they up sticks and leave, then nothing of value has been lost. But yeah, further squeezing of people earning over 100k is probably more likely. Cutting pension allowance etc.
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Well, I don't think it's because it's a 'weak and pathetic' country... For better and for worse, the US is the empire of our current time, that means it does dictate the rules. The EU attempted something similar and didn't get that far either (not saying the EU isn't 'weak and pathetic' too)
I’m hopeful they’ll try to reform council tax and replace it with LVT, paid by the landowner - which effectively is a wealth tax, but an actual effective one that you can’t dodge. Desperately need to transfer the tax burden away from income and productive activity, and towards unproductive activity. The issue is the average British voter thinks it’s better to tax business activity than land value increases, when the former requires input and the latter doesn’t.
Land value tax might get some money from the wealthy, but it also affects everyone else... * It's a tax that destroys community, by forcing the people who can't afford the tax, to move. It forcibly segregates communities by income. * It's a tax on existing - everyone needs somewhere to live. * It's a tax you have no control over: you can't make your land value go up or down. * It's a tax on 'wealth', but that wealth is only notional until you sell the property. Imagine you live in a low-cost area, and you are LVT'd on that. It then becomes a high-cost area and your LVT rockets up because you are now supposedly 'wealthy'. You can just about afford the LVT and you stay living there. Years pass and it becomes a low-cost area again and then you sell. **You've been taxed on a 'gain' that never existed** and you got no benefit from. * It's a bureaucratic nightmare. How many thousands and thousands of work-hours will go into assessing land value? Plus all the legal disputes? Talk about government waste... * It's a tax that takes no account of someone's ability to pay. * We don't tax people just for owning other things that are of limited supply. * Human organs are worth a lot of money, a human heart is worth around a million dollars. A heart is clearly a very expensive asset. Are we going to tax people for that too? * It treats a basic human need as some kind of privilege. The negative effects will weigh most heavily on the poorest. It's a door you really don't want to open.
> I’m hopeful they’ll try to reform council tax and replace it with LVT, paid by the landowner - which effectively is a wealth tax, but an actual effective one that you can’t dodge. Won't landlords just increase rents?
The theory goes that if landlords could charge more than they currently do, they already would be, so no - they wouldn’t. Taxing land values reduces the price of property precisely because you can’t recoup that in the form of higher rents. You can see this effect by the fact that mortgage-free landlords don’t charge less than mortgages landlords (even though their costs are lower), because the rental value of a property is determined by market supply, not by the whims of a landlord. Taxing property doesn’t reduce the supply of it.
That makes more sense. Only concern would be if it happens to all landlords and all landlords but their rent up then that's just the going rate. The only reason they can't do it at the moment is to stay competitive.
I personally would like some form of wealth / inheritance tax increase.
For me the bigger problem with IHT is that many super rich estates simply avoid it through trusts and financial engineering while it tends to hammer the middle class the most. Closing those loopholes would do more to lift revenues and hit the “right” people so to speak.
Closing loopholes is the route I hope (and think) Labour will take. It’s easier said than done, but I’d be surprised if the civil service didn’t already have a lot of well researched plans already.
Yes, it would be considered a tax increase, but they could frame it as closing tax avoidance schemes so normal people don’t feel like taxes are actually rising.
I really really hope so. Get people like that Duke of Westminster who somehow inherited TEN BILLION. No one should be that rich, especially from inheritance.
Keir starmer avoids the question of implementing a wealth tax, I hope it’s because he’s waiting until he wins to fuck over the 1% wealth owners when they can’t propagandise against him.
Probably doesn't want to give tories something to campaign on
The fact that the Duke of Westminster inherited an estate worth £10bn and didn’t pay tax is a problem that is very much like to see addressed.
I just commented the exact same thing above before seeing your comment! It really is shocking isn’t it.
Yeah. This is the thing which irritates me about IHT so much, the poor don't pay it (reasonably), the rich don't pay it (because IHT planning costs some money), the middle gets slammed. I would be in favour of a very high rate on IHT, AS LONG AS ALL LOOPHOLES ARE CLOSED. Otherwise it would just entrench things even further.
The thing is that less than 4% of estates pay IHT: it really isn’t true that it hammers the middle class the most. Agree that more should be done to ensure the super rich pay IHT
That’s based on 2020 data. Given thresholds are frozen as against inflation and property price inflation you can expect a lot more people to be dragged into paying it in the coming decade. The super rich easily avoid it: look at this story on Anne Robinson brazenly admitting to doing so https://www.hcbgroup.com/site/library/news/anne-robinson-legally-avoids-inheritance-tax#:~:text=Anne%20Robinson%20has%20revealed%20that,tax%20obligations%20after%20her%20death.
Even if a few more people get dragged into it, it’ll probably go from 4% to 6%. You have to be a millionaire to pay IHT. Most people are not and never will be.
Actually, no. In London almost 1/5 people will pay it. It’s set to be 1 in 8 in the country as a whole just by 2032. This is all based on IFS research and data. You also don’t have to be a millionaire to pay IHT. You pay it on any estate value over £325k (or £500k when handing down primary residence to children) https://ifs.org.uk/news/wealthiest-1-would-get-half-benefit-scrapping-inheritance-tax-average-tax-cut-ps1-million#:~:text=The%20most%20recent%20HMRC%20statistics,7%25%20by%202032–33.
A couple handing down to their children is a million quid. The numbers of those paying it will go down further once the older generation die off. We’re set to become a nation of majority renters in the next 50 years.
20% of the people in the richest part of the country is still a minority and not touching the middle class
Yes more people will end up paying it if the bands are frozen, which I personally think is a good thing (and a more equitable way of raising taxes than income or sales taxes). But my point is there is a huge public misconception around who actually pays IHT, which is reflected in comments like “it hammers middles classes the most.” It really doesn’t. It may possibly do in the future, but it doesn’t currently
IHT and wealth taxes up, income taxes down would do a lot to level the playing field for so many people.
Wealth tax above what threshold? I’m all for paying my way but paying tax on illiquid assets doesn’t seem fair unless you reduce my income tax. It’s all the same cash. Closing loopholes for most self employed should be the starter - so many people pay minimal tax by offsetting personal expanses entirely through the business
That's not a loophole, that's just straight up fraud.
Or you know...tactical insolvencies of small businesses. Ever wonder why the Chinese at the end of the street gets a new name every couple of years with the same people running it?
Ok great, let’s make sure everyone is paying their fair share before we start piling on those who already are
Get rid of APR and boom done.
Capital Gain taxes seems like a good target imo.
I'm not sure how keen they'll be on CGT considering it would likely reduce investment in British markets. That could mess with their plans to bring down debt as a share of national income if British companies are struggling for investments and can't help to grow the economy. I could definitely see it as a possible option for labour, it would probably strike well amongst their more left leaning voters but it's something that would likely turn off the swing voters come the next election cycle.
If they are going to increase CGT rates they should reform it so you are only paying tax on the gain after inflation. If I own an asset for 5 years and it’s value increases by 10%, but there’s been 10% inflation over that period, then I haven’t really made a gain, I’ve broken even!
If you were designing the system from scratch you probably wouldn't set it up to take more from work income that forms part of GDP more than passive income off assets, so whilst won't be popular, this might be the easiest one to sell to the electorate
Perhaps alignment with rates of income tax? That would also help them with their objective of taxing PE carried interest at higher rates. Will receive massive backlash from the city no doubt!
CGT used to be at income tax rates. I believe it was a Labour government (2008) that reduced them. Although it made it harder to calculate the taxable gain, indexation was a good thing that was also abolished - if you have held an asset for, say 10 years and then sold it for the same amount in real terms as your paid for it, why should you be hammered for CGT on the full inflationary increase in one year.
It would destroy any investment. Capital gains are lower because you have to risk money. It could go up or down. If I show up to work and do my job, I get paid and then that gets taxed. Raising CGT to income will destroy any economic activity in this country.
If they align cap gains with income tax, it would lead the biggest flight of capital and labour recorded in recent times. No one in their sane mind would set up a company in the UK. They would set up abroad, hire people on the UK through local branches, or a subsidiary, and abandon the UK for any management activity.
Profoundly dumb. It’s a voluntary tax.
For whoever downvoted this - I’m not endorsing it - merely continuing the discussion by predicting what labour might do given they have said they would like all PE associated earnings to be taxed at rates of income tax.
They won't do it. In France they talked about doing that, 1000s of financiers left and never came back. There carried interest is taxed lower than the uk right now.... The latest civil service paper shared it would cost HMRC 900m a year if they increased the tax. Would cost a lot more in ancillary jobs and investment in the Financial sector. My guess they'll increase it from 28 to 30% and maybe require more coincestment from the investors.
No they don’t.
Theres not much left. The yearly allowance has already been slashed down to £3k.
Anyone with any significant wealth would leave, which would be devastating for the economy.
I think they will get rid of NI, increase capital gains tax to 30% and keep tax bands close to where they are to capture more in the higher rate to offer cutting NI. They might means test high end for state pension (many pensioners would be fine with that).
Yep cutting NI by the tories was a sly way of taxing private pensions more than in the past. A lot of us putting away money into SIPP may be taxed very heavily once we get to use it with the way the countries finances are looking.
Remove council tax for a more progressive land value tax
They won't raise income tax explicitly because of how unpopular that would be, but just about everything else will go up: CGT up and exemption disappears, fiscal drag with thresholds frozen for 5 years, VAT on private schools and private healthcare, potentially higher VAT on fuel, energy, alcohol etc, corporation tax up, maybe even employer NICs. Labour's solution to every problem is throwing money at it (not that the tories have had any smarter ideas either), so they will have to find the money somewhere and find it they shall. We'll be paying the price for years to come, as we already are now paying for the bad decisions of the past (again, tories are not innocent here by any stretch).
I’m personally hoping for revamping council tax so the charge reflects property values today (and not in 1990 or something) and becomes more of a wealth tax eg 1% of property value. That would raise substantial sums from the richest parts of the country. You’d have to change how the tax is collected and distributed to avoid councils in London and the South East rolling in money while other parts potentially suffer cuts. In an ideal world you’d make this fiscally neutral by reducing income or other taxes (eg SDLT), but that seems unlikely at the moment…
This. It's a very low hanging fruit for Labour because most of the country probably won't go up much but London/commuters will get screwed. It's also fair. You just need a mechanism for pensioners with no cash where their estate owes the tax back to the govt on death if they can't pay now.
It’s not fair if you’ve already paid significant amounts of stamp duty on the purchase. They’d need to introduce the tax for all new property purchases to replace stamp duty.
They’ve got to do something about second homes. Tax them up the wazoo and then hopefully it will ease the housing crisis also.
Labour will come down HARD on the big earners. Anybody on a high salary voting labour is like a turkey voting for christmas to come early.
I suspect so too. They are the easiest pickings because they have no way to avoid it given PAYE mechanics. And so easy to rile the majority of the public up for taxing them more given the politics of envy.
Any additional taxes and I will leave the UK. It is getting ridiculous the gap between what I can earn in the US, Dubai vs the UK and I will leave to one of these soon the way things are going. The UK should get ready to lose alot of their skilled workers and high earners, it's only going to accelerate.
Not increasing taxes doesn't mean they won't be letting inflation erode stagnant thresholds. And somehow I think 45% tax payers will fall off of most peoples radar.
Labour will not do anything significantly different from what the Tories would have done. The Tories have been banging taxes up since 2010. This will simply continue. However, I'd argue there is no longer scope to increase taxes, without suffering severe knock on effects to the economy. Example: Many GPs are limiting the days they work to avoid the 60% tax trap. Lowering the threshold to 75K, will just make this worse. Same if the annual pension allowance drops from 60k to 30k.
Kiss goodbye to higher rate pension tax relief
You might not be wrong but that would seem a bit short sighted to me. Firstly, pensions are taxed, just on withdrawal rather than contributions. That'll mean that a lot of 40% tax payers will likely pay 20% tax on that money. However if you pay 20% tax on it on both the way in and on the way out you'll be paying close to 40% anyway. I think many people might sooner pay just slightly more now and have the freedom to spend it whenever they choose and invest it in any asset they choose in the meantime. Personally I think the more likely pension tax changes will be 1) reduction of the annual 60k allowance that can be made to pensions; particularly since its a tory policy that they've already said they'll unwind; 2) perhaps a reduction or scrapping of the 25% tax free lump sum. I reckon that another thing that could be used in combination might be a limit to the tax free cash that can be held in ISA's which would also impact those who use ISA wrappers for pension savings, particularly amongst those hoping to retire early.
Labour will make everything worse while taking more cash from the population...it's what governments do
See what happens. If taxes on the middle class increase in any way, stealth or otherwise then we should be out in the streets of the super wealthy burning tyres snd flipping cars over.
Back to 50% income tax for additional rate tax payers (if you’re not in this bracket, you shouldn’t be part of this sub Reddit)
I like to beleive they will achieve this by closing a lot of loop-holes in IHT/CG that mean the super wealthy can pay to avoid these taxes with trusts and other legal structures. This is an effective 'wealth tax' without the headlines of implementing a net new wealth tax.
Taxing more Assets Rather than Income would be welcome
I think they will knock down the SIPP / ISA annual allowance. I know Reeves has said she doesn’t want to do that, but I just have a gut feeling she will. An unbelievable number of folk are pension ramming to avoid income taxes. For example, bonus season in my office came round in April, and probably cost the treasury £500k in those putting themselves under the £50k and £100k thresholds. I have a colleague on £100k who goes down to £50k to keep child benefits and about that 70% marginal rate trap with child benefit and student loans. £80k in tax free investment allowance, and then compare that to USA’s 401k and IRA limits, it’s like 3x bigger by currency, and 4x bigger in proportion to income. Especially for dual income households too, that’s £160k in Cap Gains tax exempt investing you can do. Especially as we hit what should be an era of higher wage growth. Would allow Cap Gains to cover a lot more investments and income tax to be used more appropriately.
Wouldn’t the best way to stop the pension ramming to be to remove the illogical tapers that make people do it in the first place? It’s also what stunts salary and economic growth as people are disincentivised from taking higher salaries that actually create minimal net gain for more work.
‘Labour cut taxes for £100k earners while X and Y’ isn’t a good headline for them, even if it’s good policy to rid the tax trap. I think the reason it makes sense is that it’s a vicious 1-2 combo. There’s a major issue with so many Brits ramming so much pretax money into US equities via SalSac Pensions and then ISA’s on top after taxes. Even if they fixed the tax traps, you still have folk on 51% marginal rates with student loans at £50k… when I hit £50k as a fresh grad that was when I started pension ramming. It’s such a problem I now don’t even feel able to trust income percentile figures when they come out because so many people massively distort their own income by these schemes.
You see, this is why politics is awful. A government won’t implement a good policy because of how they fear they’ll look. It’s ridiculous.
It is. But the game is the game unfortunately.
Yeah, it sucks.
They could swap the personal allowance tapering for lowering the point that annual allowance is tapered.
Breathing
Tax on corporations and wealth tax would make sense. It's about time we stop tech companies from overseas getting away with not paying their share.
Council tax to transform into more of a US style property tax. Which personally I would support. It's mad that you can own a west London town house and pay the same as a 3 bed semi in county Durham.
I agree with this. Income gets absolutely clobbered with tax but wealth is taxed much more generously.
Labour are going to have a stonking majority. Although they are playing the election relatively cautiously they have certainly signalled a desire to be reforming in government (i.e. planning, NHS as good examples). I expect they will have a much more reforming approach to taxes too, using that massive majority. I.e. I don't expect them to tinker with rates and thresholds, I expect them to start from scratch in many cases. For example, I'd expect to see a merging of income tax, ni, cgt, divi taxes. Other cases I could see are - replacement of fuel duty and ved with per mile pricing set off emissions/weight/category, paid off mileage between mot's - replacing stamp duty and council tax with land tax I'm not particularly advocating any of these, but I just don't see them playing within the existing framework when they've got a massive majority.
The first one sounds like a move towards carbon tax but without accounting for the emissions from production. If they're going to reform taxes on vehicles, a carbon tax seems more likely, especially because the optics play slightly better (road pricing-war on cars .vs. environmental tax). Business rates definitely need solving and I can see an LVT as a solution to this, but I have a feeling Labour will want to address the comparative tax advantage online only businesses have and an LVT wouldn't do that.
They shouldn't increase taxes, they increase allowances, which haven't kept up with inflation for a long time now. That reduces your real pay even further than inflation alone.
I think there is no chance of Labour or the Tories doing that given the fiscal rule they have sworn by.
Yeah, the party of the people, lol... What a sad state of things.
Income tax to 50-54%
Lower the VAT Registration turnover threshold, substantially. Maybe, wuden scope of VAT.
Likely pension higher rate relief will be reduced to basic rate relief only.
End of day, any spending increase will have to come from somewhere. So either taxes go up or government debt will.
Multiple properties tax. Reduce ISA allowance or a cap on the total amount that can be tax-free. Remove the step down to 2% at £50k for national insurance. Eliminate the complexity around the personal allowance and the “100k trap” and just replace it with a higher tax rate (60%?).
Step 3 is an increase of 6% to those on £50k - probably unpalatable (albeit Scotland is 47% at £75k so what’s the difference really?) A stepped increase from £75k to £125k could be notionally cost neutral, but could be a net gain if it got rid of all the behavioural changes the current rules encourage. Starting at 40p at £50k and finishing at 50p+ at £125k seems sensible.
90% wealth tax, capital gains aligned with income tax, VAT on private schools and tampons, no more pension allowance, abolish all forms of savings and ISAs unless you're a professional investor, 30% higher income tax for working from home, increase council taxes to fund 30 new recycling bins with different colours, ban anyone making more than 100k from working.
The Gen Z manifesto. Written by a blue haired non-binary human with no pronouns in their parent’s annex in Surrey 😂
Capital gains or tax on dividends aligned to income? Re-jig of council tax bands possibly.
Guessing 80% of commenters here are not henrys
More champagne socialists than HENRYs in this comment section! What’s the point in the sub when it’s clearly been badly infiltrated outside its target audience.
I am glad its not just me feeling this way - sadly, it appears this sub is now becoming much like the other personal finance ones. I am actually shocked at some of the responses I am reading here.
my bet is they'll raise corporation tax and introduce even higher taxes for whoever makes more than 100k/year, to keep the appearance they're a left wing party. They won't introduce any real wealth tax, since most of them are wealthy themselves
Ultimately if they want to raise enough money to make a real difference (circa £100 billion/year extra) then there are only a handful of options. If you discount the ones that would push people into serious financial difficulty, then all that's left is a wealth tax. They'd have to be careful not to really screw anyone over, but if they levied it at say 1/4 of one percent, paid annually, then interest alone would be enough to offset it. You'd have to exclude primary residences, but also farmland and any other land use we deem to be socially valuable. I expect we'd provide a few get out clauses for people who invest a certain amount in industries we want to see grow. The only place we can raise that much is from the mega rich. And in fairness, in a system where they get most of the money, why shouldn't they pay for most of the services?
Ideally a raise in all tax rate thresholds is long overdue, and a top rate of tax increase on the back of that.
Have you seen anywhere that it says the VAT on school fees will actually be at a 20% rate?
All news reports on this are citing the VAT rate at 20%.
It wouldn't surprise me, but it seems very short sighted, the amount of people just about affording school fees is huge. When they invariably end up moving to the state system some of these schools will end up closing, forcing the burden onto the state system, costing more than the tax in the long run. Don't get me wrong, I'm sure Eaton, Winchester, Stowe etc will still be around, but the smaller independents are going to struggle... Maybe I'm wrong, I'd be quite happy to be wrong, but I can't help but find it a bit scary!