Auto Amazon Links: No products found. Blocked by captcha.
Rachel Reeves, the Chancellor, is facing a challenging task as she prepares for the upcoming Budget in November. Economists have warned that she might be on course to violate her own government borrowing limits unless she can bridge the gap between public spending and tax revenue. To address this issue, there have been discussions about potential reforms to stamp duty and other property taxes, as increasing income tax, national insurance for employees, or VAT has been ruled out.
One proposal under consideration is the adjustment of capital gains tax (CGT), which is a levy on the profit made from selling an asset. Currently, CGT does not apply to the sale of primary residences, but there are discussions about eliminating this exemption for higher-value properties. This change could lead to a significant increase in revenue, but critics argue that it might impede property transactions. Simon French, from Panmure Liberium, mentioned that the removal of CGT relief could be lucrative but contentious.
Another reform being contemplated is the abolition of stamp duty, a tax imposed on property purchases. This tax is based on the property’s value at the time of acquisition rather than any subsequent value increase. While this change could reduce barriers to property transactions, it would also result in a loss of revenue, as stamp duty generated £11.6 billion in the last fiscal year. To offset this revenue loss, there have been discussions of introducing alternative property taxes, such as taxing owner-occupiers selling homes above a certain threshold.
Additionally, there are talks about revamping the council tax system, which is used to fund local authorities. The current system is criticized for using property values from 1991 as a basis for taxation, leading to disparities and complexity. Despite the need for reform, proposed changes to the council tax system have faced scrutiny for potentially redistributing funds unfairly among different areas. This presents a challenge for the government in its efforts to modernize council taxes and ensure equitable taxation. The Treasury has refrained from commenting on these potential reforms, emphasizing a commitment to keeping taxes on working individuals as minimal as possible
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found. Blocked by captcha.