Labour will be increasing taxes
Rachel Reeves, the new Chancellor has announced that they are currently considering raising taxes in the next budget which is set to be released on October 30.
Reeves has already announced cuts which will be made including restricting the winter fuel payments for pensioners. This come after the news that the conservatives were hiding a £22b hole in public spending due to overspending giving Reeves the task to repair public spending priorities.
Which taxes are likely to be increasing?
The Labour party are sticking to their promise of not raising VAT, National insurance and income tax protecting the finances of working people.
Labour have been forthright with their plans to increase tax for the most wealthy including large corporations who find tax loopholes.
Pension tax
The Independent note that the considerations from the Chancellor of a potential flat 30% pension tax relief rate so higher earner would pay 10% in tax whilst those on the additional rate would pay 15%. This would raise £3b a year as 7 million people will be paying this extra tax.
VAT on private schools
The plans for Private schools to begin paying a 20% VAT which should raise £1.7 billion. Private schools work as a business and are currently able to avoid any taxes as an independent school.
Inheritance tax
The IFS has noted that ending loopholes on inheritance tax could raise £4.9 billion a year by 2029. Currently inheritance tax only applies to the amount over £325,000 where 40% of the amount over this is paid as tax from any land, money and possessions. In 2023/24 this raised £7b however, IFS believes ending measures such as business relief and common special exemptions could increase the earnings.
Capital gains
The IFS has noted that ending loopholes on inheritance tax could raise £4.9 billion a year by 2029. Currently inheritance tax only applies to the amount over £325,000 where 40% of the amount over this is paid as tax from any land, money and possessions. In 2023/24 this raised £7b however, IFS believes ending measures such as business relief and common special exemptions could increase the earnings.
