Labour Tax plans, IA calls for shares tax to be scrapped, Businesses urge Labour to scrap tourist tax
THE HOT STORY
Rishi Sunak accused of lying about Labour tax plans
Financial Times? ??The Daily Telegraph? ??The Daily Telegraph? ??The Guardian ??The Independent UK ?
Sir Keir Starmer has accused Rishi Sunak of "deliberately" lying about Labour's tax plans. In Tuesday evening's TV debate, the Prime Minister claimed a Labour government?would result in ￡2,000 of tax rises per working household to cover for a ￡38bn black hole in the party’s plans. Speaking to the media for the first time since the debate, Sir Keir said: "Last night really mattered because what you saw was a Prime Minister?with his back against the wall, desperately lashing out and resorting to lies - and he knew he was lying. And I don't say that lightly.” The UK's official statistics regulator, the Office for Statistics Regulation, is looking into the claim. But ConservativeTreasury Minister Laura Trott denied Mr Sunak had lied and insisted independent analysis had identified a black hole in Labour's spending plans. She said: "This is underpinned overwhelmingly by Treasury analysis so if people think Labour are going to win this?election they need to start saving." ?
ECONOMY
Next government advised to raise taxes
Financial Times? ??The Times ??
The National Institute for Economic and Social Research (NIESR) has called on the next government to raise ￡61bn a year in tax revenue to meet self-imposed fiscal?targets. The think-tank argues that the next government will not be able to reduce the deficit to below 3% of GDP until 2031 without additional spending cuts or tax rises. NIESR criticised the current fiscal rules as "arbitrary" and warned that they will force?the next government into painful choices that could harm growth and investment. The think-tank recommends income tax rises and the introduction of a land value tax to encourage development.?Separately, a poll by Ipsos for the?FT?shows 56% of voters expect the Labour party to raise taxes if they win the election, while 52% said they believe the Conservatives will hike taxes if they prevail.?
City predicts Labour will backtrack on tax pledges
Investors believe Sir Keir Starmer will break his promise not to raise income and corporation tax, a poll by Nomura shows. About 60% of City institutions surveyed?expect Starmer to raise taxes if Labour wins power. George Moran, Nomura research analyst, said: “The view is that Labour would most likely break its pledge to not raise corporation or income tax. Without any major changes in interest rates or the growth outlook,?Labour will face tough choices on fiscal policy. It would be optimistic for Labour to rely on improvements in the economy.”
Public believes Tories more likely to raise taxes
Sky News? ??
The public believes that the Conservatives are more likely to raise taxes than Labour, according to a recent poll conducted by Savanta. The survey, taken before?the tax issue dominated the first TV leaders' debate, found that 41% of respondents do not believe the pledges from either party not to raise major taxes such as income tax, national insurance, and VAT. The online survey of 2,217 UK adults also revealed that?only one in six believe Prime Minister Rishi Sunak will not raise major taxes, compared to one in four for Sir Keir Starmer, leader of the Labour Party.
IA calls for shares tax to be scrapped
Daily Mail ?
The Investment Association (IA) has called on the next government to scrap stamp duty on shares to help revive the fortunes of Britain's beleaguered stock market.?Chris Cummings, chief executive of the IA, said the move was an obvious way to boost the attractiveness of UK equities. The tax charges investors 0.5% when buying UK shares but nothing if they put money into foreign firms. Cummings argued that greater reforms?to the listings environment were needed. “In a post-Brexit world, the UK needs to signal clearly that we are open for business,” he said.
CBI warns against windfall tax on North Sea oil and gas
Daily Mail? ??
The Confederation of British Industry (CBI) has expressed concerns over Labour's plan to raise the windfall tax on North Sea oil and gas companies. The CBI, representing?190,000 businesses, believes that such a move could negatively impact investor confidence in the UK. In its business manifesto, the CBI called on the next government to commit to no further sector-specific taxes. Mohammad Jamei, the CBI's director of economic?policy, stated that increasing windfall taxes would have a detrimental effect on investor sentiment. The CBI also urged the government to monitor corporation tax rates and ensure they remain internationally competitive. The CBI stressed the importance of a?stable and predictable tax system in attracting international investment.
Businesses urge Labour to scrap tourist tax
The Mail on Sunday ?
Leading businesses, including Mulberry, Marks & Spencer, Kurt Geiger, and Selfridges, are pressuring Shadow Chancellor Rachel Reeves to eliminate the tourist tax?if Labour wins the election. The tax-free shopping policy, abolished by Rishi Sunak in 2021, is costing the economy over ￡11bn annually, according to the Centre for Economics and Business Research. Despite calls from businesses, the Conservatives have refused?to remove the tax. Labour does not support its removal but firms are urging the party to conduct a formal assessment.
Gatwick harmed by tourist tax, says CEO
The Daily Telegraph ?
Rishi Sunak's tourist tax has put Gatwick at a competitive disadvantage, according to the airport's CEO, Stewart Wingate. The removal of tax-free shopping has hindered?Gatwick's ability to attract wealthy passengers and long-haul airlines. Wingate argues that the tax is holding back the airport's growth and suggests that abolishing the tourist tax would help London retain its status as a global transportation hub.
Rise in long-term work sickness to cost UK ￡18bn in lost taxes
Daily Mirror ?
The rise in long-term work sickness is projected to cost the UK over ￡18bn in lost taxes, according to analysis by the Liberal Democrats. Since 2019, there has?been a 700,000 increase in individuals off work due to ill health, with 6.3m people still awaiting treatment on NHS waiting lists. The Office for Budget Responsibility estimates that each person off work long-term results in an average of ￡5,200 in lost tax?revenue. If this trend continues, it could lead to a loss of ￡3.7bn in tax revenue per year or ￡18.3bn over the next parliament. Ed Davey, leader of the Liberal Democrats, blamed the Conservative government for the state of the economy and the struggling healthcare?system.?
Torsten Bell parachuted into safe Labour seat
Torsten Bell, the chief executive of the centre-Left think tank, the Resolution Foundation, has been parachuted into the safe Labour seat of Swansea West. The?Sunday Telegraph?notes that Bell has previously espoused a number of tax-raising measures, including capping tax-free Isas at ￡100,000 and lowering the VAT threshold for small businesses to ￡30,000. Sir Edward Troup, a former head of HMRC who is advising?the party on tax, previously suggested the threshold should be halved.?
INCOME TAX
High-tax Britain 'is driving out top earners'
The?Telegraph?talks with relative high earners about how their lifestyles do not correlate to their six-figure salaries, with high taxes and costs leaving them scrimping to get by. One example is a compliance director at a large bank earning around ￡145,000.?She says: “I get almost 50% tax on everything. I worked out I have to earn ￡45,000 a year to get to work. It's exhausting, quite frankly, watching every penny and working really hard. It's just endless bad news.” The feeling is not uncommon, but some are deciding?to leave rather than continue with the struggle. Simon Goldring, a self-employed tax adviser moved to Dubai last year. He has moved several British clients to Dubai and he can't see it getting any better. He says: “The higher tax rates get, the more you create?a disincentive effect and the more you make the UK less attractive.”
Chancellor confirms stealth tax on workers will stay until 2028
Financial Times? ??The Daily Telegraph? ??The Guardian ??The Independent UK ?
Jeremy Hunt has confirmed that a freeze on income tax thresholds will continue until 2028, after which a Conservative government would raise them. The Chancellor?told the BBC: “I can absolutely undertake that the threshold freeze that we introduced until 2028 will not continue after that.” By contrast, Sir Keir Starmer said “the burden on working people is too high” but Labour would not make any pledges on raising?the thresholds. The Institute for Fiscal Studies warns that the freeze will bring 4.5m more people into higher income tax thresholds by 2028. Meanwhile,?Labour has stated that the party will not increase value-added tax if it wins the upcoming election. This?comes after Chancellor Jeremy Hunt claimed that Labour had not clearly ruled out a VAT increase.?
Stealth tax raid to cost workers thousands
City AM ?
Analysis by AJ Bell shows frozen tax thresholds will leave a worker earning ￡50,000 in 2021 paying an extra ￡14,000 in tax up to 2028, assuming their pay rose in?line with inflation. The Office for Budget Responsibility has estimated that frozen thresholds will mean an extra 4m people start paying tax over the period, with the Treasury raking in an extra ￡40bn compared to if the thresholds had risen in line with inflation.?“The Conservatives are effectively giving with one hand by lowering NI and taking away with the other through the stealth tax of frozen thresholds,” Tom Selby, director of public policy at AJ Bell, observed.
Britons embrace side hustles to supplement income
The Times? ??
A recent study commissioned by accountancy group Sage reveals that Britons have become a nation of side hustlers. The cost of living crisis has prompted people?of all ages to seek additional income streams. While young people are still the most likely to have a side hustle, a quarter of middle-aged Britons now have a way of earning extra cash. The most common sources of extra income are selling second-hand clothes?or upcycled furniture, freelance writing, technology jobs, and health and wellness advice. Side hustles can provide a significant boost to earnings, with 16 to 34-year-olds earning an average of ￡546 per month. Many young people aspire to turn their side hustles?into full-time businesses. However, the research also suggests that many people may be avoiding paying tax on their second income. The number of workless households in the UK has reached a 12-year high, despite the rise in side hustles.
HMRC
HMRC’s own staff say system is broken
The Times ?
The?Times’ Rachel Mortimer talks to an HMRC worker who says the tax office's customer service is worse than people think. The individual says the system is “broken” with the repayments team promising refunds are on their way when they have yet to be processed.?The staff member also alleges that one third-party printing company will not print any letters involving zero liability. This means letters to taxpayers must be manually printed at the office and posted by hand. If an agent is working from home they have to?message a colleague in the office to do it, increasing the risk of error. Mortimer says the situation sounds like something out of The Thick of It, “but with real repercussions.”
New HMRC fraud and error taskforce to clawback Covid payments
Birmingham Mail ??Daily Record ??
A new HMRC fraud and error taskforce has been established in a bid to recover overpayments made to UK taxpayers during the pandemic. The ￡100m Taxpayer Protection?Taskforce of 1,200 HMRC staff will combat fraud and aims to recover up to ￡1.5bn from fraudulent or incorrect payments for the 2022/23 financial year. HMRC is also working with enforcement bodies, including the National Investigation Service (NATIS), to investigate?serious cases of fraud. So far, NATIS investigations have led to 49 arrests related to Bounce Back Loan Scheme fraud, while the Insolvency Service has achieved director disqualifications, bankruptcy restrictions, and company wind-ups. "Fraud is totally unacceptable,?and we're taking action on multiple fronts to reclaim money stolen from the taxpayer," said HMRC.
Taxpayers with overseas assets face growing scrutiny
Data obtained by Price Bailey shows HMRC made 2,388 requests for information about taxpayers with overseas assets in 2023-24 – the highest level in at least seven?years. The number of requests made to foreign tax authorities was double that of 2018-19 and the tax office sent out 23,500 “nudge letters” to those suspected of having an undisclosed liability. The tax clawed back by HMRC leapt up in that period from ￡19.6m?to ￡57.2m. Andrew Park of Price Bailey said: “HMRC began issuing nudge letters in 2023-24 to wealthy people named in the Pandora Papers. It cannot be a coincidence that the amount generated from offshore nudge letters trebled to nearly ￡60m as these taxpayers?came under HMRC’s spotlight.”?
领英推荐
HMRC's Pandora Papers ‘nudge’ letters draw meagre response
Financial Times? ??Birmingham Mail ??
A campaign launched by HMRC to encourage UK taxpayers named in the Pandora Papers leak to declare overseas income and gains has resulted in just 14 disclosures,?data obtained by the think-tank TaxWatch shows. Claire Aston, director of TaxWatch, said: “While it's too early to know how much UK tax is due on these assets hidden overseas, there's a public interest in these figures and scrutiny of HMRC's approach to offshore?non-compliance.”?
PENSION TAX
Labour denies plans to change pension tax relief
Daily Telegraph? ??Daily Mail ??Express.co.uk ???The Times ?
Labour has denied any plans to change pension tax relief, following claims made by Jeremy Hunt. The party had previously suggested introducing a flat rate of 33%?pension tax relief, which would impact higher earners. Labour has also stated that it would reinstate a standard lifetime allowance for tax-free contributions. Mr Hunt claimed that Labour would target pensions, citing a previous move by Gordon Brown to scrap?tax relief on pension funds' dividends. He claimed that Labour governments "try to increase taxes wherever they think it won't be noticed." Labour responded by stating that there are no planned changes to pensions tax relief.
Doctors quit NHS in fear of Labour’s pension tax raid
The Daily Telegraph? ??Daily Express ?
Labour’s plan to reintroduce the pension lifetime allowance is prompting senior medics to leave the NHS, according to the British Medical Association (BMA). Jeremy?Hunt, the Chancellor, abolished the ￡1,073,100 limit last year, in an effort to stop experienced NHS staff quitting the workforce to avoid tax bills. But shadow chancellor Rachel Reeves vowed to reverse the move, reportedly leaving doctors “really anxious.”?Dr Vishal Sharma, the BMA’s pensions committee chairman, said: “The biggest challenge to getting the NHS waiting list down is not enough staff. If there is one policy that is going to make that worse, it’s this one.”
Retirees urged to be cautious over pension tax changes
Financial advisers want wealthy savers to resist a knee-jerk reaction to Labour plans to reinstate the pensions lifetime allowance, saying there should be reasonable?notice before the change is made.?
CORPORATE
Father of Molly Russell calls for windfall tax on tech companies
The Times ?
Ian Russell, the father of Molly Russell, the 14-year-old who took her own life after viewing disturbing online content, has called for a windfall tax on technology?companies as a form of "pollution" payment. Russell has published a manifesto through his charity, the Molly Rose Foundation, which includes a five-point plan for online safety. He argues against banning under-16s from smartphones and social media, saying?that this would penalise children for the failures of Big Tech. Instead, he proposes strengthening the Online Safety Act, placing a duty of candour on tech companies, and is urging Apple and Google to take stronger action through their app stores.
TAX EVASION AND AVOIDANCE
Tackling tax avoidance won't be easy
City AM ?
City AM?looks at how much could realistically be raised by a crackdown on tax avoidance after both the Tories and Labour said they could find billions this way. Last year, HMRC estimated that the tax gap was ￡36bn but avoidance itself makes up only ￡1bn of this.?It said around ￡11bn is caused by a “failure to take reasonable care” while “error” makes up a further ￡5bn. Tim Sarson, head of tax at KPMG, said: “There is certainly more that can be done to collect underpaid tax.” But he adds: “The trouble is most of the?tax gap is down to accidental or deliberate underpayment by small businesses and individuals, not grand avoidance schemes by huge multinationals.” Recovering this would be labour-intensive and would mean “more boots on the ground as well as greater investment?in technology,” he explained.?
Tory and Labour tax avoidance crackdown is ‘tall order’, say experts
Experts say Conservative and Labour pledges to raise up to ￡6bn annually by cracking down on tax evasion and avoidance are a “tall order” unless the focus is widened?to include reducing errors.
STAMP DUTY
Hunt's tax on granny annexes comes into effect
House buyers could see their stamp duty bills double as Jeremy Hunt's tax on annexes comes into effect. The Chancellor has abolished Multiple Dwellings Relief (MDR),?meaning those buying houses with adjoined buildings will have to pay stamp duty twice. The change aims to stop commercial landlords buying up apartments in bulk. However, industry bodies warn that between 13,000 and 25,000 homes may not be built as a result.?The relief's removal is expected to raise ￡385m per year for the Treasury. Michaela Seager, of tax adviser RSM, said the tax change will mean a “massive difference” in cost for some buyers. “We had one case this week, where they're trying to get a purchase?over the line and about ￡30,000 of tax is at stake.”
INHERITANCE TAX
Conservatives plan big cuts to inheritance tax, predicts George Osborne
Financial Times? ??The Daily Telegraph? ??The Daily Telegraph? ??Daily Express ??
Former Conservative chancellor George Osborne is predicting big cuts to inheritance tax as Prime Minister Rishi Sunak goes all out to win back some support ahead?of the general election. His comments come as Conservative MPs again call for the tax to be reformed, with Sir David Davis, who served as Conservative chairman and as Brexit secretary, saying the threshold should be raised from ￡1m to ￡5m. “We should raise?normal middle-class families out of paying inheritance tax completely so that they don't have to worry about it,” he said. “Taxes should be about encouraging and rewarding people who do the right thing, and being able to hand your house over to your children?is doing the right thing.”?
Tories call for IHT to be scrapped
Rishi Sunak is being urged by senior Conservative MPs to make a manifesto pledge to abolish inheritance tax in order to differentiate himself from Labour leader?Sir Keir Starmer. Inheritance tax thresholds have been frozen since 2010, and many consider the tax as unfair as it penalises savers who have already paid tax on their income. Nadhim Zahawi, a former chancellor, described the tax as having "catastrophic results"?for families and the economy. The move is supported by Liz Truss, Rishi Sunak's predecessor, and Dame Priti Patel, a former home secretary. Labour politicians have indicated their opposition to any cuts to inheritance tax. A poll found that over half of the?country supports the abolition of inheritance tax. The Institute for Fiscal Studies estimates that one in eight people will face an inheritance tax bill in the next decade.
VAT
Most families would keep children in private school despite VAT, experts say
The Times? ??
Most families are likely to keep their children in private schools even if Labour adds VAT to fees, according to experts. Research suggests that only one in seven?parents would remove their children from private education if the full 20% VAT were passed on.
COUNCIL TAX
Conservatives rule out council tax revaluation
The Times? ??The Daily Telegraph ?
Chancellor Jeremy Hunt has announced a new pledge in the?Telegraph, described as a "family home tax guarantee", saying that if the Conservative government is re-elected, it will not "increase the number of council tax bands, undertake an expensive council tax revaluation, or cut council tax discounts", will?maintain private residence relief to protect main homes from capital gains tax, and will not "increase the rate or level of stamp duty". Mr Hunt claimed that shadow chancellor Rachel Reeves' previous support for a council tax revaluation, updating bands that?were last set in 1991, and currently underway in Wales under Labour, means Ms Reeves and party leader Sir Keir Starmer "are coming for your family home".
Desperate councils force families to pay double council tax on homes
Councils across the UK are facing criticism for imposing double council tax rates on homeowners simply trying to sell their properties. A new policy allowing councils?to charge a 100% premium on vacant homes after just one year, down from two years previously, was intended to discourage wealthy second-home ownership. However, the shortened time frame has inadvertently caught ordinary families in a tax trap as they struggle?to sell inherited or vacant properties. With a lack of clarity in the regulations, councils are not required to refund households wrongly charged the higher rates.
INTERNATIONAL
Nearly 130 countries commit to saving global tax deal
Nearly 130 countries have recommitted to saving the first pillar of a global tax deal on highly profitable multinationals by the end of June. The talks, held in?Paris, failed to produce an agreement, but the co-chairs of the meeting stated that negotiations were nearing completion. The multilateral treaty aims to replace national digital services taxes that target U.S. digital giants. If an agreement is not reached,?a standstill deal on national digital services taxes could expire in July, potentially reigniting trade tensions between the U.S. and its European allies. The treaty codifies how governments are to reallocate taxing rights on $200bn in profits from the largest?multinationals to the countries where their sales occur. The first pillar is part of a two-pillar deal that also includes plans for a global minimum corporate tax rate of 15%. However, negotiations have faced reservations from the U.S., India, and China. U.S.?Treasury Secretary Janet Yellen highlighted transfer pricing as a key issue, while India and China have been less engaged in the talks.
Spain to change law to adapt OECD tax rate
Reuters? ??
Spain’s government said on Tuesday that it will adapt the country’s legislation to introduce a 15% minimum corporate tax rate on multinational firms, in line with?an OECD-wide agreement to prevent tax avoidance. The current headline corporate tax rate in Spain is 25%, but many exceptions allow firms to pay a lower effective rate. The new 15% minimum rate will apply to companies with revenues over €750m.
Opinion: we need to talk about the super-rich
The Guardian ?
A?Guardian?editorial says a conversation needs to be had about the super-rich and their “exploitation” of loopholes to cut tax liabilities. In July, G20 finance ministers will discuss new proposals for an annual 2% global tax on the wealth of the world’s?3,000 or so billionaires. The architect of the plan is French economist Gabriel Zucman, who claims the wealth tax could raise $250bn a year. Brazil, France, South Africa and Spain have expressed support for the idea but some are sceptical such a tax could?be implemented. Regardless, the debate should be had in good faith, the paper contends, pointing to the successful implementation of the minimum corporation tax as a sign that “an age in which footloose, mobile capital could please itself may be coming to?an end.”