Labour to target one tax in October Budget because 'it is easiest way'
The Labour Party will target one tax in the coming Autumn Statement, according to reports, because it is the "easiest way" to raise revenues. Rachel Reeves, the Labour Party Chancellor, is scrambling to fill a £22 billion black hole left by the Tories.
Tax experts have explained that inheritance tax is likely the easiest way to do this. Jasmine Birtles, money expert and founder of MoneyMagpie suggests that inheritance tax might be a "better way" to bring in money compared to other taxes that could harm productivity in the economy.
Speaking to Andrew Eborn on Octopus TV she said: "If it was me I would look at inheritance tax. It is an unfair tax but all taxes are unfair to somebody - you just have to think about what works." She continued: "It simply doesn't work to tax the richest more. It's not fair to make those earning more to pay more. I think that inheritance tax is an easier way to bring in a lot of money.
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"It's an easier way to bring in money, and it effects less people. Only four per cent pay and it doesn't materially affect our productivity like VAT taxes do. I'm not happy about this as it's harming high street shops and businesses who are already on their uppers.
"You need to think what would harm the economy and what would stop people from working and amassing wealth and try not to do those. All taxes do harm but try what will do the least amount of harm." Laura Hayward, tax partner at professional services and wealth management firm Evelyn Partners said: "Inheritance tax is likely to be a growth area for Treasury revenues in the coming years. With the baby boomer generation now hitting their 60s and 70s, some of that generation’s accumulated wealth is being passed on to children and grandchildren, and getting taxed on the way.
"The ‘great wealth transfer’ is also underway because many of the older, asset-rich generations are making lifetime gifts to their families. As the wave of inheritance is set to grow over the next 30 years to a transfer of £5.5trillion, the temptation for successive Governments will be to tap into it to plug gaps in the public finances.
“The Office for Budget Responsibility forecasts that the share of deaths resulting in the payment of inheritance tax will rise to 6.3 per cent by 2028–29, the highest level since the 1970s. That proportion was as low as 2.7 per cent in 2009/10. Revenue from inheritance tax and its predecessors has increased over time in real terms, from around £2bn in 1980/81, to £7.5bn in 2023/24, and will reach almost £9bn by 2028/29 (all amounts in 23/24 prices)."