Group says it has identified £21 billion haul
A cross-party think tank has called on Chancellor Rachel Reeves to introduce a series of tax reforms aimed at landlords, owners of high-value homes, and wealthy investors who leave the UK.
The proposals, set out by Demos, are designed to generate £21 billion in additional revenue without increasing the main rates of VAT, income tax, or individual national insurance contributions.
Among the eight recommendations, Demos suggests the introduction of an “exit tax” for investors relocating from the UK, the application of national insurance to rental income, and the requirement for those inheriting assets to pay capital gains tax on the increase in value since the assets were purchased, rather than from the date of inheritance.
The think tank argues that these changes would create a fairer tax system by easing the burden on salaried workers, removing preferential treatment for capital gains, and limiting tax reliefs on inherited assets. Demos maintains that these reforms would address perceived imbalances in the current tax structure.
The recommendations would allow the chancellor to avoid breaking a Labour manifesto pledge on taxation, the cross-party organisation says https://t.co/Ie7vJnDmnL
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Research commissioned by Demos and conducted by Opinium in April indicates broad support for the proposals across the political spectrum. The survey found that 39% of Reform UK supporters would back an exit tax, while around 40% supported an additional council tax charge on properties valued above £2 million. The survey also suggested that the public would be less supportive of balancing the budget through spending cuts, particularly in areas such as investment, the NHS, and welfare.
Demos further recommends raising more than £3 billion by increasing taxes on gambling operators, a move also advocated by the Institute for Public Policy Research. The think tank proposes raising the general betting duty from 15% to 25%, excluding horse racing, and increasing both the remote gaming duty and machine games duty to 50%. Demos claims these measures would not only boost revenue but also help to mitigate social and health issues linked to gambling.
“The public can get behind tax rises if designed with their priorities in mind,” said Dan Goss, lead researcher at Demos. “The pursuit of a fairer tax system is a vital step towards fixing the fraying social contract between citizen and state.”
Reeves is expected to unveil significant tax increases at the upcoming budget, as higher government borrowing costs have reduced her fiscal flexibility since the spring statement.
The government is considering major property tax reforms, including replacing stamp duty with a national proportional property tax on homes over £500,000, reforming or replacing council tax, and ending capital gains tax relief for high-value primary residences. These proposals aim to raise revenue but may increase annual costs for owners of expensive properties and landlords, while reducing upfront costs for some buyers.
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