Rachel Reeves has a list of potential tax hikes for her autumn Budget. And it’s VERY long.
Rachel Reeves has a list and she’s working her way down it (Image: Getty)
The Chancellor has to raise anything between £20billion and £50billion in this Budget. It’s all too much for her, so she’s handed the job to pensions minister Torsten Bell. The former Resolution Foundation boss is a tax-raiser of maniacal proportions, who’s devoted his life to calling for sweeping new levies on pensions, savings, property and just about everything else. And also wants to scrap the state pension triple lock.
Bell’s fingerprints are already on last year’s Budget, with inheritance tax on family farms and businesses tightened in line with his proposals. An audit of Bell’s fiscal wish list by political website Guido Fawkes is terrifying. If Reeves implements just a fraction, she’ll leave millions even worse off. So which threaten you?
Cap tax-free ISAs at £100,000. Yes, Bell wants that. This would punish disciplined savers and destroy retirement plans.
Scrap £325,000 inheritance tax nil-rate band. This would drag all but the poorest into paying 40% IHT.
Big council tax rises for band E, F, G, and H properties. This wallops family homes, especially in London and the South East, and hits pensioners hardest.
Remove main residence relief. Incredibly, Bell would love us all to pay 28% capital gains tax (CGT) when we sell our homes. This would destroy house prices, mobility, and make every homeowner feel poorer.
Scrap the Lifetime ISA. This would axe up to £1,000 a year in bonuses aimed at helping young buyers get on the property ladder.
Lift CGT to 37% on shares and 53% on second homes. Yet another attack on savers, investors and small business owners.
Charge CGT on death AND on leaving the UK. This would see families pay both CGT and IHT on death. And anyone who chose to flee Labour’s tax blitz.
Cut VAT registration threshold to £30,000. Today, only companies earning more than £90,000 must register for VAT. This would pull a huge number of smaller firms into the net.
Scrap business and agricultural property reliefs. Reeves has already capped both, with disastrous results. Bell would like her to go the whole hog.
Hike basic-rate dividend tax from 8.75% to 20%. Yet another attack on small investors and owner-managers.
Add 1p to income tax. An instant pay cut for workers and pensioners with taxable income, feeding wage demands and costs.
Hike taxes on second homes. Another Bell idea that’s already happening, with mixed results.
Charge 8% National Insurance on rental income. This will hammer buy-to-let landlords, who will pass on the cost to tenants by hiking rents.
Quadruple the higher-band NI rate for the self-employed. Bell wants it lifted from 2% to 8%. Another blow for self-starting contractors, tradesmen and professionals. Why are the public sector never hit?
Slash the tax-free 25% pension lump sum. He’s suggested capping it at just £40,000. Anybody with more than £160,000 in their pension would lose out.
Scrap the 5p fuel-duty cut and add 2% a year. Petrol prices will jump at once, followed by a ratchet that squeezes every motorist. Will also drive up inflation. Personally, I reckon she’ll do it.
Introduce pay-per-mile road duty for electric vehicles (EVs). Raises running costs and blunts the case for buying greener cars. Ed Miliband won’t like this.
Hike vehicle excise duty for heavier cars. Pushes buyers to lighter models but raises ownership costs. It also directly contradicts the EV raid.
Devolve income-tax rises to local authorities. Creates a postcode tax lottery and risks talent flight from high-levy towns and cities.
Scrap Entrepreneurs’ Relief. Yet another blow to enterprise and growth.
I don’t think Reeves will do all of these. She’s inept but she isn’t a total nut job like Torsten Bell. Is she? We’ll find out in the autumn.
Bell made these suggestions before becoming an MP. But it says everything about Labour today that they liked what they saw. And clearly, Rachel Reeves does.
Even a few of these would infuriate taxpayers and backfire horribly by destroying growth, just like her first Budget did. Best of luck, everyone.
