Labor and the Conservatives are proposing minor fiscal changes, but experts warn that “tough” reshuffling will be necessary to stabilize accounts after Britain’s July 4 election.
the Tax collection The campaign is focused on the British elections on July 4. Along with the promise to raise and lower some numbers, voters expect an increase in tax pressure in the next legislature. Independent institutionAccording to the IFS calculations, 36.1% of the fiscal pressures in the 2023-24 financial year will go to 37.4% in 2028-29 with Labour, which has the best chance of winning, and with the Conservatives it will reach 36.8%. The IMF sees an adjustment of £30bn (€35bn) as necessary.
Experts accuse the major parties of “Conspiracy of silence“Given the difficulties the government is facing due to its sensitive situation, with debt rising to 99.8%, its highest level since the 1960s.
Conservatives led Rishi SunakThe Prime Minister put a tax cut of 17.2 billion pounds (20.3 billion euros) on the table. Its main measures are to reduce Social Security by two points and cancel it for self-employed workers, at an annual cost of 10 thousand million pounds, in addition to that retirees will not have to pay taxes on the amount of the public pension. The governors plan to compensate for the decline in income by providing non-essential services and by increasing their effectiveness in combating tax fraud.
“Promising so Personal income tax, value added tax, corporation tax, capital gains or savings tax will not increase “On pensions, not only are the Conservatives keeping in place some of the most ridiculous cuts, they are not proposing urgent, fundamental reforms that a serious party should deliver,” explains Stuart Adam, chief economist at the IFS.
High business tax
from their side, exhaustion They explained in their election platform that they would raise taxes by £7.35 billion (€8.7 billion) and the new income would come from combating tax evasion and implementing a 20% value-added tax on private schools.
Their leader, Keir StarmerHe said that We will not raise taxes on the “working class” He explicitly ruled out increasing value-added tax, personal income tax and corporate tax. The planned changes, in addition to those mentioned for private educational centres, include the inclusion of… Advance attention (Taxes on venture capital managers) within personal income tax, compared to the current 28%; done with trust In tax havens seeking to avoid inheritance tax; Adjustment of some deductions for businesses, and changes to equalize taxes imposed on online businesses with traditional businesses. In addition, the tax on windfall profits for energy companies is extended and the benefits for non-resident residents are cancelled. (non-dom)Which may cause the rich to flee.
The pressure has intensified com. starmer To define what the “working class” is and, by exclusion, who can be taxed. This party does not rule out raising the capital gains rate.
Link hands
“The Promise Don’t touch some taxes “It restricts the government’s ability to respond to changes, but at least Labor is not completely tying its hands,” says Helen Miller, deputy director of the Institute for Fiscal Studies, who points out that “substantive tax reform” is missing.
Both formations will not change personal income tax (Income tax). Since salaries are rising and brackets are frozen,… The government will bring in additional billionsso that the potential reduction in other numbers is compensated and global collection increases relative to GDP.
Experts say that in light of the debt, deficit and financial pressures at the top, and in light of the poor state of public services, the next government will have to confront… “Difficult” decisions. On income and expenditure, they are much less friendly than they appear in their electoral programmes.
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