Moves against pensions, assets, and property are being considered to fill in an estimated £3 billion financial gap, according to an expert
Chancellor Rachel Reeves is believed to be preparing “targeted moves” on pensions, assets, and property(Image: PA)
Chancellor Rachel Reeves is believed to be preparing “targeted moves” on pensions, assets, and property, an expert has warned.
This would be to fill in an estimated £3 billion financial gap left from the Labour party Government’s U-turn on welfare cuts.
Nigel Green, CEO of finance firm deVere Group, said “the question is no longer if taxes will rise in the UK, but how quickly and how sharply”.
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He added: “This is the moment for anyone with UK assets to stop waiting and start acting. The Treasury can be expected to go after capital, property, investment income — because that’s where the money is.”
He said that wealth holders face “real, very targeted moves” on “portfolios, pensions, business assets and property”.
Labour’s manifesto promised not to raise income tax on “working people”, but Green said ministers have been “careful with the language — and the definition”.
This leaves scope for “significant moves on capital gains tax, dividend income, inheritance thresholds and so-called ‘wealth loopholes'”.
He explained: “This is where the money will come from and not just for the shortfall, but to fund public services and keep the bond markets happy.
“When governments feel cornered, they move fast. The people who protect their wealth are the ones who plan early.”
However, a prominent think tank member has suggested the government doesn’t need to raise taxes to fill in the financial hole.
Arjun Kumar, who previously worked at PwC and now heads Taxd, has argued that the Labour party government has more options to get the UK out of its financial hole than just taxing UK households.
e said: “The idea that Labour’s only option to fill the £41 billion black hole is to hike taxes is simply not true.
“As it stands, Total Managed Expenditure is £1,285 billion so a spending review could easily fill the fiscal gap, without raising taxes.”
Kumar suggested reductions in government expenditure rather than additional levies on taxpayers.
He continued: “Punishing hardworking people with higher taxes won’t fix the economy; it will kill the growth we desperately need.
“Instead of a one-dimensional approach, Rachel Reeves should be looking at smart, targeted spending cuts and creating an environment where businesses can thrive.
“Higher taxes will just send entrepreneurs and investment abroad, grinding our economy to a halt.”