The Resolution Foundation has said that Philip Hammond should raise £7 billion through changes to the UK’s wealth taxes.
The UK’s leading think tank released a report ahead of the Hammond’s government spending review, with suggestions on how to finance public services with the increased demand from the ageing population.
“Yes, this is politically difficult, but the good news is that relatively large sums can be raised simply by tightening up our existing wealth taxes and subsidies. That is how we protect our public services without placing all the burden of taxation on hard-earned income from work,” said the director of the Resolution Foundation, Torsten Bell.
Five wealth taxes that can potentially be “tweaked” are entrepreneurs’ relief, council tax top band rates, inheritance tax loopholes, pension lump sum tax relief and Help to Buy Individual Savings Accounts.
Adam Corlett, who is an analyst at the Resolution Foundation, said that tightening wealth taxes will be unavoidable as pressure on public services grows.
“Britain’s wealth is undertaxed, and the wealth taxes we do have are in serious need of reform. There’s a strong case for scrapping council tax and inheritance tax altogether, and replacing them with proper wealth taxes that are more progressive and harder to avoid … [but] even without comprehensive reform of our main wealth taxes, loopholes can be closed, fairness improved and billions raised to fund the needs of an ageing society without hitting the pockets – or votes – of the majority.”