U Turn on Income Tax Rates Means 'Odds On' Tax Hikes for Others

If the report in today’s Financial Times is true that Chancellor, Rachel Reeves has opted to not increase income tax rates for all to fill up another ‘blackhole’ gives us near certainty that other areas touted for rises will come in the Autumn Budget on 26^th November.

The FT reports that the Chancellor has decided against increasing income tax rates as it would be a breach of their election manifesto promises as well as being unpopular with her party and voters in general.

Virtually ‘Odd On’ Tax Changes

• All personal tax allowances to be frozen yet again.
• Inheritance tax nil rate band threshold to be frozen past 2028.
• Higher road taxes, alcohol, and tobacco taxes for all.
• For Electric Vehicles, a new road tax.
• Higher gambling firm taxes.
• Capital gains tax increases.

‘Even Odds’ Tax Changes

• Dividend Tax rates to increase or even the possibility of national insurance contributions on the same
• Rental Profits to have higher income tax rates and again, the possibility of national insurance contributions on the same.
• New wealth or property taxes for properties over £1m to £2m.
• Reduction of the Lump Sum Allowance (tax free cash from pensions to you).
• Reduced Cash ISA annual allowance.
• Increased inheritance tax rates for larger estates, say over £3m.
• Ending the ‘Triple Lock’ on state pensions.
• Allowing Local Authorities a greater margin of more than 5% on council tax increases.

Comment

We must say, if the FT article proves to be true, it is yet another politician putting politics and popularity first rather than the good of the country. 

To spend more on public services, you need to tax us all more, not just the wealthy few, who we agree should pay more proportionately but we should all contribute to paying more taxes or have lower/frozen benefits for better funded public services.