Shadow Chancellor Rachel Reeves has previously announced that under a potential Labour government led by Sir Keir Starmer, there would be no rise in income tax, National Insurance or VAT. Now, in a further update in recent days, Sir Keir Starmer has said Labour would also not increase inheritance tax if elected. He also confirmed the party would not raise corporation tax.e.
As the options narrow, the outlook seemingly becomes clearer:
- Labour has remained silent on Capital Gains Tax and Stamp Duty despite many of their own members and the Chancellor requesting that they clarify their intentions.
- Aside from Capital Gains Tax rises and SDLT rises, as other taxes will be frozen, are we likely to see the removal of related reliefs, such as the curtailing of Business Property Relief?
The public continue to wait for a shift in focus from what definitively won't change to what will.
Labour is expected to produce their manifesto next week. In the meantime, business owners ought to be taking full advantage of the current tax reliefs while they still can.
Labour Urged to Increase Wealth and Capital Gains Taxes to Achieve Social Justice Goals, Say Academics
In an opinion piece in the Observer, political academics Colm Murphy and Patrick Diamond suggest, alongside new wealth taxes, capital gains tax rates should be raised to be in line with income tax rates. They argue that the task ahead for Labour “is to forge a politics of prudence that blends the commitment to social justice with a disciplined approach to the public finances.” The first objective is to adhere to fiscal rules, followed by undertaking significant tax reform. Murphy and Diamond state, “There is an overwhelming economic and ethical case for higher taxes on wealth and for taxing capital gains at the same rate as income.” They also propose launching a commission on UK tax reform to help convince the public that these taxes are crucial for achieving Labour’s progressive goals.
How Can Qubic Help?
To navigate these potential changes, Qubic offers tailored tax planning services. Our expertise can help mitigate the impact of higher taxes and leverage current reliefs effectively. The window of opportunity to leverage current tax rates and reliefs is narrowing, and the time to act is now.
We understand that the uncertainty surrounding tax changes can be challenging, and we are here to help you.
For more information on our tax planning services and to discuss your options with one of our team, simply click the link below:
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