Boris Johnson, Prime Minister of the United Kingdom has presented his plans to increase National Insurance’s levy from 12.5% to 13.25%. Boris Johnson, the Prime Minister of Boris Johnson announced the plan in the Commons. He stated that the cost of the program will be divided between businesses and individuals. “Those who make more will pay less.” It is estimated that the levy will raise approximately PS12 billion. This money, however, will be used in the initial years to pay for the NHS backlog. Today, the Prime Minister admitted in Commons that he had violated a 2019 manifesto promise.
Fears that these plans will have adisproportionate impact on younger people are leading some to call for an increase in wealth taxes.
For the period April 2021 to July 2021, PS2billion was collected in inheritance taxes. This is an increase of PS500million compared with the previous year.
Julia Rosenbloom is a tax partner at Smith & Williamson and warned that the Treasury’s dependence on wealth taxes has increased.
She stated that “one of the main drivers of the uplift will be the announcement made in the Spring Budget this year, that the residence nil and nil rates bands were to be frozen till at least April 2026. This means increased inheritance taxes bills for families due to the inclusion of more estates on the backs of rising property and share price prices.
The Government will continue to invest to rebuild the country after the pandemic and fund social services. It will undoubtedly be expanding its horizons to increase its cash reserves.
We don’t yet know the date when the Chancellor will release his next Budget. However, it is possible that personal taxes (including inheritance and capital gains taxes) could undergo a major overhaul due to the annual amount they generate for the Treasury.
Increases in inheritance taxes could impact many, and some might have to sell their family homes to cover inheritance tax. People should begin tax planning immediately to make the best of current allowances and avoid any future reforms.
Although the inheritance tax system has been relatively unchanged so far, Mr Sunak announced in March’s Budget the freezing of the PS325,000 threshold at the rate the levy is payable until 2026.
He justified his decision by stating that it would “strengthen public finances” in the midst of the pandemic.
Express.co.uk interviewed a wealth tax expert last month. This was the most fair way to raise money to support social services.
Tom Selby is an analyst at AJ Bell. He stated that wealth taxes were probably fairest. This ensures those with broad shoulders will be targeted for COVID-19.
It would be fair, but whether they think they have the political ability to do it politically is another matter. People who avoid bills will face challenges.”
In response to Mr Selby’s question about whether inheritance taxes could rise, he predicted that the government would instead seek change.
He said, “You have two options: increase or decrease inheritance tax. They have historically chosen the thresholds option and it is what I believe they will choose again.
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Numerous Labour Party members have suggested that wealth taxes are the preferred path, including Shadow Foreign Secretary Lisa Nandy.
Ms. Nandy stated that she is open to the possibility of an increase in wealth taxes, such as capital gains and inheritance tax.
She stated that the “broad principle” (that those who have wider shoulders should bear some of the responsibility) was “absolutely correct”.
After the Trades Union Congress (TUC), which called for an increase of capital gains tax in order to raise PS17billion per year, this was done.
Andy Burnham (Mayor of Greater Manchester) has also echoed these sentiments.
Last week, he stated that the best way to fund new social services reforms is by taxing wealth.
Publited Sat, 11 September 2021 at 06:00:00 +0000