Rachel Reeves faces taxpayer revolt – 10 ways Brits are fighting her tax blitz and WINNING
Taxpayers are under constant fire from the Chancellor. Now they’re resisting.
Rachel Reeves keeps hiking taxes – and keeps meeting resistance (Image: Getty)
UK taxes were already at an all-time high when Labour won last year’s election. In her Budget, she increased them by another £40billion. She’s coming back for more this autumn, but taxpayers have had enough. Here are 10 things they’re doing to beat the blitz.
1. Pensioners are spending up. Reeves thought she was clever by slapping inheritance tax (IHT) on unused pensions from April 2027. Pensioners are wiser. New HMRC figures show a 24% rise in the numbers taking flexible pension withdrawals in the first three months of this year, pulling out £5billion in total. They’d rather spend their hard-earned savings than hand 40% to HMRC.
2. Families are gifting. Another way to counter Reeves’s pensions IHT raid is to give the money to loved ones. TWM Solicitors reports a surge in pensioners giving excess income to loved ones. Warning: don’t gift money you may need later.
3. Millionaires are walking. Or rather, jumping on their private jets. The Office for Budget Responsibility predicted that Reeves’s decision to slap 40% inheritance tax on wealthy foreign non-dom’s global fortunes would drive 25% out of the UK. And that’s exactly what’s happening.
One in four is leaving, latest HMRC figures confirm, and taking their tax revenues with them. Home-grown millionaires are off too, with a net total of 10,800 millionaires leaving in 2024, the highest in the world after China. Thousands of jobs in retail, hospitality, legal services and luxury goods will vanish with them.
4. Sellers have stopped selling. In the Budget, Reeves hiked the main rates of capital gains tax (CGT) to 18% and 24%. She was told it would raise billions but guess what? Provisional HMRC figures CGT receipts actually FELL as a result.
They dropped almost 10% to £13.1billion in the 2024/25 tax year. CGT is a cinch to avoid. Just don’t sell. Higher rates = lower tax take. Who knew?
5. Employers aren’t hiring. Reeves’s biggest Budget mistake was to pile £25billion of extra National Insurance (NI) onto hard-pressed employers. The only way cash-strapped businesses can escape this is to fire workers, stop hiring or go bust. And that’s what they’re doing.
An estimated 276,000 jobs have been destroyed, with another 100,000 gone by year end. Thousands of firms have gone bust, including pubs, shops and restaurants. Jobs are getting hard to find, especially for the young. Nice work, Chancellor.
6. Parents are dodging school fee VAT rise. Reeves slapped VAT on private school fees. Fifty schools have since closed, forcing 10,000 pupils into the state sector, driving up costs and class sizes. Reeves claimed the cash raised would fund 6,000 new state school teachers. Number funded so far: none.
7. Savers are grabbing their tax breaks. Reeves hasn’t attacked our tax-free ISAs yet, but she still might. There has been talk of cutting the Cash ISA allowance to £4,000, or setting a 100,000 cap on total pots. The result?
Britons poured a record £14billion the tax-free ISA wrapper in April alone, a massive 20% rise on the same month last year. That’s more money Labour can’t get its hands on.
8. Workers are sacrificing salary. Thanks to the income tax freeze, which Reeves could extend to 2030, employees are taking pay as pension instead, via salary sacrifice. Worker and boss both save themselves NI. Another backfire for the Chancellor.
9. Second homeowners are converting. Since April, councils have been free to charge double council tax on holiday homes (triple in Wales). This was originally a Tory hike. Either way, it’s not working.
Holiday homeowners are converting idle boltholes into bona fide holiday lets, and paying lower business rates instead.
10. Farmers have a beautiful plan. Slapping IHT on farms is just plain vindictive. Some farmers are fighting back by exploring heritage tax relief, which exempts buildings and land in areas with “outstanding natural beauty and spectacular views”.
The harder Reeves taxes, the more Britons will fight back, and the slower our economy grows. There are plenty of legal ways to cut your tax bill, so explore them today.
