Major capital gains tax update issued ahead of Rachel Reeves Budget
Chancellor Rachel Reeves will reportedly leave capital gains tax (CGT) UNTOUCHED in the forthcoming Labour Party Budget. Ms Reeves is reported to be mulling over leaving capital gains tax on property untouched, according to reports.
Fears among landlords and second home owners that tax would rise in the Budget are said to be unfounded. The Institute for Public Policy Research (IPPR) said that interviews it had carried out with millionaires suggested most would not be put off investing by a rise in CGT.
One, Julia Davies, told the IPPR she had “never let tax rates dictate my decisions to fund innovation or pursue opportunities”, while the Photobox co-founder Graham Hobson, said the claim that increasing CGT would discourage investment was “simply a myth”.
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“Capital gains tax was equal to income tax when I set up Photobox. It didn’t stop me from starting and growing a successful business,” Hobson said. The prime minister told the BBC that Labour was “very clear in the manifesto that we wouldn’t be increasing tax on working people” but had made no commitments on employers’ NI contributions.
Bridget Phillipson, the education secretary, told the broadcasters on Thursday that the government had “some really tough choices” to make. The Chancellor has reportedly faced backlash from her fellow Cabinet ministers, including the Deputy Prime Minister, as her first Budget is expected to include £35billion worth of tax rises - the highest ever in history - as she commits to ending austerity.
It has been suggested that proposals set out in the Budget on October 30 will involve the first increase in fuel duty since George Osborne's freeze during the coalition Government, as the Treasury aims to fill a '£40billion financial hole' in the public finances.
Speculation has also surrounded rises in capital gains tax in addition to employers' National Insurance contributions.