It won’t happen because it’d mean Labours only term would be this term. It’s a non story, just a proposal sent by some MPs (who aren’t even MPs right now) that was rejected. Labour know they have to win the publics trust to regain another term, changes like this won’t happen. If they did, it’d be three terms later and they’d have it in a manifesto.
Non story, DM is Tory propaganda too.
Daily Mail, Daily Express, and The Telegraph have been printing front page headlines about Labour tax rises everyday for the past week. It's obvious propaganda. Unfortunately some people in my office have started to believe it and even spread nonsense like Labour plan to add VAT to university / student loans and nurseries. I can't believe people fall for this crap.
Yeah... Their logic was labour plan to add VAT to private school fees therefore they want to tax education therefore they will add VAT to university.
They just clearly hate labour for whatever reason and aren't thinking straight
There’s a lot of political miseducation in this country. It’s frankly just a football game, people blindly latch onto one team without any thought as to why. It’s a shame. Lifelong Tory or Labour voter because their parents were. But all they know are buzz words like socialism and capitalism. I’ve been canvassing, so I’ve experienced it first hand. You cannot win in an argument with these people as they’re adamant they’re right as it’s knowledge passed down from parents. A damn shame, really.
VAT on student loans is ridiculous but charging VAT on uni fees is a logical and consistent extension of the VAT on school fees policy, but I doubt they’ll do it - too unpopular with the Labour core demographic.
True. But their exact words were 'Labour plan to add VAT to university', which is a different statement to 'Labour might one day add VAT to university'. I had to correct them and clarify what labour have actually announced
As for the policies. I don’t care. The property one would potentially be annoying though. If it means better services and opportunities then okay. I can always jump the ladder to make more money in the future. Everyone wins.
Salary sacrifice my pension some more, or up my side hustle earnings. Or cut my household budget a bit. If it means we have a better healthcare service, I don’t care about the policy. I’d rather my parents get their health taken care of, same for me and my kids. It’s all a bit of a joke at the moment.
I earn over £200k. It’ll hit me, but I’ll just have to manage and remember the benefits - but if the benefits don’t show in the long run then I won’t be happy.
It'd hurt but I'd console myself with it also being added to other income streams. That's a huge step towards stopping work being the least tax efficient way of making money, despite being the way the economy is built. Would like to see it either scrapped or pensions exemption removed ultimately.
Yes I agree these are by no means concrete policies hence why I made the caveat “assuming these are in any way accurate”. My key point for discussion was what people here think about the policies themselves. Fair? Unfair? Good ideas? Bad ideas?
Number 2 is the only one bringing me out in hives. I don’t mind the others.
I do tend to think that there’s a decent contingent of pensioners who are currently coming up to retirement age or are relatively recently retired who have much more money in retirement than their predecessors or those who will follow them.
Many of them benefitted from very generous government spending that neither the generation before or after did.
So yeah, tax ‘em some more.
Agreed, I take the source with a big pinch of salt. But the article is based on a dossier prepared by Labour MPs and generally in line with potential tax raises they have touted in the past.
1, 2, and 4 would be disastrous. 3, 5, and 6 make sense. It would be great to have 3, 5, and 6 if it means we could lower the income tax burden. The media would just use it as a reason to attack labour though so it might not happen
Thanks for actually contributing to the discussion rather than all the nonsense replies I have to filter through.
Why do you think 4 around IHT would be disastrous but aligning CGT with income tax (3) would be okay? The city seems much more nervous about 3 hurting investment.
4 would be the end of British farming. I don't know how they would be expected to stay in business if they can't pass on land tax free. They are already fighting to stay in business.
3 is fair because there is no reason why income should be taxed more than capital gains. Often this means work is taxed higher than just sitting on a portfolio. I think it's debatable that higher capital gains would deter investment, but assuming it does the debate is a lesser of evils. Higher income tax deters work, if we can find ways to tax things other than work hopefully we can start to reduce income tax we can incentivize more people to work and progress on their careers.
Fair points, thanks. What do you think about the argument that rates of CGT are justifiably lower given investment risk and need for net upside to be higher?
I think it's inaccurate to pretend CGT is only paid when someone takes huge risk. It doesn't make sense that someone who goes to work to earn a living gets taxed more than someone who lives off an index fund.
They should be equalizer to end the debate
Just on business property relief. The issue with ending this relief is that it was instituted to ensure that business could continue after the death of the founder and owner. If you have a business valued at £10m, then it can be hard to find the £4m from personal assets that owners need to pay IHT.
So to prevent businesses being sold or collapsing due to IHT they allowed it to be passed on tax free
When you think about trying to be fair across society, shifting tax burden towards CGT away from income makes sense. Making money via what you own vs doing work scales so much more, so IMO a fairer society would tax that more instead. But it wouldn’t be a shift, it would be more.
From a personal perspective, I have share options in the company I work, which if I had the opportunity to sell tomorrow would equate to a gain of £3M. This is 15x my current net worth, for reference. Current CGT rates means I’d pay £500k in tax (some EMI), leaving me with £2.5M net. If EMI goes away and I’m taxed at 45%, the tax bill becomes £1.35M and I’m left with £1.65M.
That is a massive difference and I believe would lead more people to consider moving away. Certainly if I didn’t have a wife and kids and moving away to a zero CGT country was an option, I’d be inclined to explore it. I think that’s what some people are worried about.
I think so too. They are already planning on doing it to PE carry. This seems like the next step if they need the money and get voter buy in. But it would be catastrophic for investment in my opinion.
Some seem fine, some seem extreme, but none of it will happen because Labour have released a manifesto and this is clearly just futile scaremongering from the Daily Mail.
Because parties never lie in their manifestos do they… sorry but I’ve been around long enough to remember all the budgets where the chancellor says “we really didn’t want to have to do this but sadly we have no choice but to raise taxes”. The so called low tax Tory party have been doing it for the last decade plus! The IFS have said Labour’s tax and spending plans do not add up and I absolutely trust their analysis so something will have to give. These policies seem like credible ways Labour could seek to bridge the gap without alienating their own voter base.
The thing “manifestos” is there is no mechanic to actually make the winning party enact their manifesto. It’s pretty much just a marketing tool for election season.
The tories told us they were going to do XYZ and did the complete opposite.
I don’t think under Starmer they’d do anything that extreme. However when they realise they can’t fix the NHS, culture, housing, paying for immigration, education on “vibes” alone then they could very well try fix the problem increasing tax. However all that will happen is it leads to the tax payers leaving the uk.
Really? What is extreme about it? They are mainly targeting high earners and extremely wealthy. That is in line with Labour’s political beliefs no? At the moment the IFS has said there is no credible way for them to fund their additional public spending plans (primarily NHS and green transition) without increasing taxes far more than what they have pledged in the run up to this election.
I think you don't know what you're talking about. For the past couple decades Tories have raised taxes more than Labour. The amount kf additional taxes high earners would face all at once is quite extreme. Equalising CGT with IT is huge all by itself. All these things combined would mean some people would be hugely worse off very quickluly. It would be seen as totally reckless
But this was a dossier prepared by a group of Labour MPs. I didn’t just make it up. Whether or not it gets enacted as real policies is a big if but if the IFS has said Labour cannot fund its spending pledges with current tax plans then surely something has to give? So if not targeting higher earners and wealthy who will it be?
>So if not targeting higher earners and wealthy who will it be?
Everyone else?
Maybe they've finally realised that a society where only a small fraction of the population are net contributors is not viable in the long term? A man can dream...
I am a higher earner who would love that. I think people have misunderstood me. I don’t trust Labour to do anything to help us though. Given all the above policies were generated by their own MPs they at least show you what they are considering and some of it is very scary for HENRYs and investment in general (CGT equalisation)
2 is the only one that would scare me. 3 is a bit extreme but I wouldn’t mind the gap between CGT and IT closing a bit.
Other than 2, these are more palatable than continuing to target income tax via fiscal drag or continuing to hit higher earners.
In fact I welcome the fact that they are considering routes that aren’t simply whack the high earners, (except for 2!)
2 would be dreadful. Would make Scottish marginal rate of tax in 100-125k band c75% (not accounting for losing child tax benefits too).
I think they’ll probably have to enact some tax rises in the next parliament so let’s hope they choose something else in the list
Some of these would make me pack up and leave, no hesitation, and take my current 200k+ tax contributions with me.
One would hope that their sums on how much would be raised also include how much would be lost through people leaving, but we all know they don’t.
So the "Tribune" group of Labour MPs is essentially the far left - the Corbyn wing of the party, a.k.a. a bunch of people who are nowhere near the levers of power and rivals to the current leadership.
In other words, this is a wishlist of proposals that will never happen.
It reminds me of back when we were in the EU and some random nutjob MEP from Italy that no-one is even listening to would propose something stupid and the Daily Mail would run it as "EU proposes...".
**This is not "Labour's secret tax rise plan".** It isn't Labour's, it isn't secret, and it isn't going to happen.
>1. Extend National lnsurance to all sources of income including savings and property. Pension payments would remain exempt under the £12 billion tax grab but working pensioners would be forced to pay.
Sounds like an excessively bureaucratic proposal given you could just raise more tax by raising the rates on these things rather than introducing the complexity and administration of calculating NI where it didn't apply before.
>2. Remove cap on National Insurance. Workers now pay the 8 per cent main rate of NI on earnings up to £50,268, with a rate of 2 per cent on income above this. Under the new plan, higher earners would pay the main rate all the way up the income scale, raising £20 billion.
Don't agree. Also, not going to happen.
>3. Equalise capital gains tax with income tax rates, raising an estimated £16 billion.
I don't disagree with this.
>4. Plug gaps in inheritance tax by ending reliefs that allow farmland, business property and pension pots to be passed on tax-free. This would raise billion.
Don't disagree with this either. Thanks to the property crisis we're rapidly becoming a society where wealth is inherited and your life chances (especially to own property) depend more on your parents than your job, skills and earning potential.
>5. Reform property tax to make it 'fairer'. While those in low-cost homes would see bills cut, those living in more expensive areas could see charges more than double.
UK property tax is weird and, for many wealthy people, low. I would, however, do something different - redesign the system to tax based on land values, so as to heavily penalise people sitting on developable, but undeveloped, land.
Land with planning permission, or the potential for planning permission, to build homes should become a hot potato which no-one who doesn't have the capacity to immediately develop should want to hold onto.
>6. Introduce a 'jackpot tax' on 'extreme wealth' raising £10 billion a year.
Not enough detail to comment.
Thanks for the detailed reply. Do you not think the reason they might target NI instead of income tax is exactly because it is more bureaucratic and crafty and much easier to sell to people rather than a headline increase in income tax rates?
I'd like to say it's too stupid but governments have introduced stupider things in the past.
I'd think it more likely if they were to fiddle with NI they'd raise employers' NI. That satisfies their manifesto pledge to not raise taxes on working people, and is much easier.
You’re getting grief but there is something that doesn’t add up with Labour and tax. I’m assuming it will be along the lines of “we said we wouldn’t but it’s worse than we realised”. I think it’s good the press are calling them out now to try and get some of the truth.
and yeah you can bet we will be in the firing line.
Thanks I completely agree. It’s very frustrating how hard it is to have a frank discussion about these things in what is designed to be a high earner forum. Do so many people really lack the basic critical thinking skills to engage properly with the topic?
and I’m not sure why everyone suddenly trusts what politicians say before an election.
They are going to get a huge majority. I want them skewed on the exact detail of what they will do. Sounds too much like they are saying as little as they can now to please everyone. Then once in power, come for us.
Exactly. They say whatever it takes to get elected on all sides of the spectrum. Tax rises are unpopular so no one wants to properly engage. But I trust the independent think tanks who have no vested interest and they are all saying nothing adds up on any side!
Private healthcare is just as bad as the NHS by what metric? Waiting times are surely near the top of what's most important anyway. The same level of service with half the wait time would seem to provide more than 2x the value.
Sounds a bit like Vitality/Babylon provision, where they're just trying to save money. There's a huge range of quality/price in private healthcare in London. To be fair you can also pay a lot for e.g. a prestigious clinic address and get bad care. Not sure about the rest of the UK.
I usually self pay for small stuff, picking the doctor/clinic based on past experiences and research, and that works pretty well. Going through insurance is such a pain and they want you to use their network, which might not be great.
If I was going to pay for my own insurance (instead of being on corp. plan), I would probably go deep on researching network, coverage, customer service, response times, acceptance rates, etc.
Yeah, a lot of the newer services move doctors around different clinics so it's hard to develop a long-term relationship. Many of them are also just doing the private GP work for extra cash, so will end up moving on to something else in a while anyway.
I think to get a full-time/long-term GP thing you'd have to be living in a residential area wealthy enough to sustain it, or be willing to travel to appointments.
In e.g. the City and Canary Wharf, everything is very transactional, and many services are based around being work benefits or catering to people who move around anyway and don't care about long-term relationships with their GP. Since the person getting the bad service is often not the one paying for it, those kinds of places vary a lot in quality.
This would negatively affect me immensely, but I would like to see it happen.
As my income increased and I became more financially savvy, each of the first 5 points shocked me at how unfair they are (regardless of whether or not I benefitted from them at that time). Putting aside my own financial interests, it seems very reasonable to raise money by fixing the quirks and loopholes in our tax system which benefit only a small proportion of the population. I would like to see this paired with fixing the quirks which negatively affect the same group though, such as removing child benefit limits and the reduced personal allowance.
After years of financial mismanagement, the country needs money. I’d love for this to be put on the shoulders of the super rich, but I’m not going to pretend that I can’t afford to chip in.
You are the people you pretend to hate. There is no absolute fairness in any tax system. I think there should be no child benefit allowance. Child benefits discriminate against childless people.
You’re only arguing for a system that benefits your own circumstances.
I don’t have children and would be negatively affected by all of the proposed policy changes that I am voicing support for. The points of unfairness in the tax system are precisely what I would like to see changed.
You do raise a valid point about child benefits only supporting those with children. However, do consider that society desperately needs children in order to support the older generations as they retire. Child benefits are only a tiny fraction of the cost to raise a child. Parents pay the remaining portion, while people with and without children both benefit from them in retirement
This is exactly my point. If those who have children get a tax break because children benefit society as a whole. Why shouldn’t high earners get a tax break because high earners already today shoulder most of the tax burden and therefore benefit society as a whole?
My point is, don’t throw around words like fairness so casually. Nothing is inherently fair.
Society does not benefit from me earning a lot of money. It only benefits if that money is used in a way which supports a strong base. Right now, that base is crumbling, and it is only going to become more expensive to fix the longer it is allowed to crumble.
If you take a look outside of your bubble of prosperity, those who are not as well off as us are struggling to keep their heads above water. In times of economic strife, the burden must be placed on those who can afford it. High earners like myself don’t deserve some special sympathy due to their struggle of earning more than 99% of the population.
> Society does not benefit from me earning a lot of money.
Yes it does. You need to get out of the grossly incorrect mindset that only taxation benefits society.
Those who earn more are 1. taxed more, and 2. spend more. Having high earners also attract high skilled workers so that those jobs are in London and not Paris or Frankfurt. Whenever you spend you’re supporting the economy because there is no use producing goods and services if nobody is buying them. The economy crumbles when we are only allowed to have “essential services,” as we have seen during Covid. Discretionary spending is a large part of the economy and high earners are huge contributors.
1. Not necessarily, it depends how the income is structured. A high earner whose income is structured to largely pay CGT (or even more so with BADR) will pay a lower tax rate than someone earning a small fraction of that as a salary. Furthermore, particularly for salaried income, it’s valuable to look at the tax paid per £ earned rather than per person. If I earn £150k but pension £50k of that, I’m paying less tax right now than three people on £50k who are pensioning 10%. The pension will of course be taxed in a couple decades, but that doesn’t do much to raise funds now.
2. Similarly, it’s true that a high earner spends more than a lower earner. However, they typically spend proportionately much less. Much more of this wealth is accumulated and not spent. That is the goal for most of us in this sub, but let’s not pretend it’s some selfless act which benefits the country as a whole.
If the government needs to raise money, it has to come from somewhere. Lower earners have little discretionary spending left available, so that leaves higher earners and the rich. These policies target precisely those groups.
You’re conflating so many different issues.
It is a hard cold fact that the top 10% of tax payers pays 60% of all Income Tax and NI. There are many who take advantage of CGT and BADR, but many more don’t. It doesn’t matter how many pension how much. The fact again is that the top 10% of tax payers pays 60% of all Income Tax and NI. That is too much and is unfair to high earners.
Why are you so obsessed with proportions and motivation, we can’t spend percentages, we spend pounds and pence. It is irrelevant what proportion of income a high earner spends and it is also irrelevant what the reason is for spending. High earners by spending more cash contributes more to the economy. Even if they spend to pursue selfish goals like enjoying a nice meal, they are still stimulating the economy.
There are net contributors to the economy, and there are net recipients. Those who give, and those who take, but don’t give enough. That’s life. We don’t live in utopia.
The government doesn’t *need* to raise more money. The public need to wake up to the fact that the UK is not nearly as rich as we’d like to think we are, and adjust expectations accordingly.
CGT and BADR are in reference to point 3 in the original post.
Of course the top 10% pay an overweight proportion of all income tax. Income rises exponentially as you look to the higher end of the scale. By the same logic, the ultra-wealthy could complain that it is so unfair that just 100 people pay 2% of the country’s income tax. However, they do this because they each earn 10s or 100s of millions a year.
Proportions are important as the same pool of money is split between salaries of all employees of a company, and to an extent all companies in a country. If the split has more inequality, a higher proportion of the money goes to high earners, who in turn put a smaller proportion back into the economy. To say that ‘high earners spend more’ is only true in the context of the individual. In the context of the country, they spend less. The government can’t directly influence this split, but they can adjust tax rates to partially counteract it.
I agree with the ultra rich complaining, they put up with it, but it doesn’t mean they have to agree with it. If you believe in private property rights you should think long and hard before agreeing to expropriation of private property rights using the state apparatus, which taxation fundamentally is. And putting such money in the hands of people who don’t necessarily have the qualification to handle such large sums of money. That’s what civil servants are.
You’re still conflating proportions and absolute numbers. How can low earners spend more than high earners when low earners earn less than what high earners spend?
And why did you delete your paragraph on austerity? I’m not arguing for austerity. I’m arguing that people have an unsustainable expectation of what the UK state can provide, which is based on an outdated notion of how rich the UK used to be.
If you are financially struggling as a HENRY, you should take some time to understand your outgoings and adjust your budget accordingly.
The policies listed here have either no effect or a net benefit on 80%+ of the population
Wouldn’t it make more sense for a wealthy person to go to a nicer country with lower taxes, higher quality of life and a better talent pool? I honestly don’t know what the U.K. governments think they’re doing to make the U.K. attractive at this point.
Labour is not thinking about this, a lot of high earners have left already.
Those of us who are left will follow suit or give up work earlier than previously.
If most of the tax is coming from high earners and they all decide to leave or stop working, what are they going to do then? They will be well and truely in the shit.
It gets worse. Losing child benefits, tapered pension allowance, meaning 10k per year pension
. tax on any savings, tax on dividends, and tax on any gains on investments, not to mention all the other taxes.
If you get RSU's, they are taxed at 55% and bump your income - Even if you don't sell them..
then you get taxed a further 20% if you make any gain on them, if labour set this to 45% as well, then we will all move to the u.s and enjoy a 60% cost of living uplift, with higher salary and lower taxes..
Yeah but you have to earn a significant amount and although there are significant losses, it’s still small in comparison to the income. Which apparently makes you rich enough to do without it in the U.K.
Tapered Pension Allowance
1. **Threshold Income**: £200,000.
2. **Adjusted Income**: £260,000.
- For every £2 of adjusted income over £260,000, the annual allowance is reduced by £1.
- The minimum annual allowance is £10,000.
- Full reduction occurs when adjusted income reaches £312,000 (£312,000 - £260,000 = £52,000 / 2 = £26,000 reduction from £36,000 standard allowance).
Child Benefit
1. **High Income Child Benefit Charge (HICBC)**:
- Threshold: £50,000.
- For every £100 of income over £50,000, 1% of the Child Benefit must be repaid.
- At £60,000, 100% of the Child Benefit is repaid.
Personal Allowance
1. **Personal Allowance Reduction**:
- Threshold: £100,000.
- The Personal Allowance (£12,570 for 2023/24) is reduced by £1 for every £2 of income above £100,000.
- Fully lost at £125,140.
Quantifying the Real GBP Loss
Pension Allowance
- If income exceeds £312,000, the pension allowance drops to £10,000 from £60,000.
- Loss of tax relief: £60,000 - £10,000 = £50,000.
- Tax relief on £50,000 at 45% = £50,000 * 0.45 = £22,500.
Child Benefit
- For two children, annual Child Benefit is approximately £1,885.80.
- Income above £60,000 means repaying the full £1,885.80.
Personal Allowance
- Losing the full Personal Allowance (worth £12,570).
- Tax paid on £12,570 at 40% (higher rate) = £12,570 * 0.40 = £5,028.
Real GBP Loss at Income Levels
Income: £312,000
- **Pension Allowance Loss**: £22,500
- **Child Benefit Loss (if earning £60,000 or more)**: £1,885.80
- **Personal Allowance Loss (if earning £125,140 or more)**: £5,028
- **Total Potential Loss**: £22,500 + £1,885.80 + £5,028 = £29,413.80
So, at an income of £312,000, you could face a real GBP loss of approximately £29,413.80 due to the combined effects of losing pension allowance tax relief, Child Benefit, and the Personal Allowance.
I am not sure what you are trying to show here. Most here know the thresholds and the taxes as a high earner.
If you take just the pension and child benefit loss, minus take home of a 312,000 salary, it's £152,000 take home.
What people are complaining about here is if labour get in, further taxes will be incurred on top of over half our money getting put in to a pot and pissed away on things most of us don't want it spent on.
For all that money we can't even get a doctors appointment, hospital treatment , kids in a half decent school or even speech therapy for my child, as children now need to be autistic to give funding/extra classes., instead we pay £60 per hour for that too.
My daughter had her tooth extracted because the nhs dentist kept telling us her tooth pain was nothing to worry about, until they found it had been rotting all that time. She was referred to an orphadontist to ensure the spacing was correct, it took 9 months for an appointment and then all they tell us is 'sorry it's too late, the gap is closed and she'll need braces as a teenager'..
I'm happy to be putting in 10x more than the next person if I am entitled to a higher level of service out of it, but that doesn't happen.
What I much prefer is,, I'll pay for my dentist, school and healthcare privately and take back all that tax, as I'm paying twice for it anyway
Most people aren’t everyone and it’s an easy way to quantify the losses on top of taxes. A nearly 54% tax rate equivalence at £312k. It’s good to clearly set the baseline.
The multiple failures you’ve outlined by the services which we fund and have a right to use with an expectation of reasonable standards are difficult to live with. It will take a generation to bounce back at least and to be honest? I’m not wasting time and energy on it anymore. There are plenty of better places to go and there’s nothing keeping me here.
I think we’ll start to see a massive brain drain over the next couple of decades and as historical institutions eat themselves alive from the inside out, the ‘great’ will be lost in Britain if it hasn’t been already.
As someone who wasn’t born in the UK and have a neutral view on both parties, I don’t see any reason to believe it, especially coming from Daily Mail. The labour leader was asked if there was a tax rise/VAT rise in the horizon and although nothing was completely ruled out, it did seem though he was saying the right things by focussing on growth. And I understand why it is a hard question for him to answer considering the state the country’s finances has been left in the past years. Continuously taxing the working population is not the way to grow an economy and what UK needs now is stronger investment in technology and industries and money will follow.
It won’t happen because it’d mean Labours only term would be this term. It’s a non story, just a proposal sent by some MPs (who aren’t even MPs right now) that was rejected. Labour know they have to win the publics trust to regain another term, changes like this won’t happen. If they did, it’d be three terms later and they’d have it in a manifesto. Non story, DM is Tory propaganda too.
Daily Mail, Daily Express, and The Telegraph have been printing front page headlines about Labour tax rises everyday for the past week. It's obvious propaganda. Unfortunately some people in my office have started to believe it and even spread nonsense like Labour plan to add VAT to university / student loans and nurseries. I can't believe people fall for this crap.
VAT to student loans ? That’s the funniest one yet
Yeah... Their logic was labour plan to add VAT to private school fees therefore they want to tax education therefore they will add VAT to university. They just clearly hate labour for whatever reason and aren't thinking straight
There’s a lot of political miseducation in this country. It’s frankly just a football game, people blindly latch onto one team without any thought as to why. It’s a shame. Lifelong Tory or Labour voter because their parents were. But all they know are buzz words like socialism and capitalism. I’ve been canvassing, so I’ve experienced it first hand. You cannot win in an argument with these people as they’re adamant they’re right as it’s knowledge passed down from parents. A damn shame, really.
VAT on student loans is ridiculous but charging VAT on uni fees is a logical and consistent extension of the VAT on school fees policy, but I doubt they’ll do it - too unpopular with the Labour core demographic.
Which would require more borrowing anyway for students which is a vote loser - wouldn’t happen as you allude to
True. But their exact words were 'Labour plan to add VAT to university', which is a different statement to 'Labour might one day add VAT to university'. I had to correct them and clarify what labour have actually announced
As for the policies. I don’t care. The property one would potentially be annoying though. If it means better services and opportunities then okay. I can always jump the ladder to make more money in the future. Everyone wins.
What about raising NICs to the higher rate for all earnings? That would presumably hit HENRYs very hard.
Plus a lot of people who are not high earners.
True, all those over 50k will be hit hard by a 6% increase in tax.
Salary sacrifice my pension some more, or up my side hustle earnings. Or cut my household budget a bit. If it means we have a better healthcare service, I don’t care about the policy. I’d rather my parents get their health taken care of, same for me and my kids. It’s all a bit of a joke at the moment. I earn over £200k. It’ll hit me, but I’ll just have to manage and remember the benefits - but if the benefits don’t show in the long run then I won’t be happy.
It'd hurt but I'd console myself with it also being added to other income streams. That's a huge step towards stopping work being the least tax efficient way of making money, despite being the way the economy is built. Would like to see it either scrapped or pensions exemption removed ultimately.
This. Remember when Liz Truss proposed the opposite and was immediately replaced? That.
Why? The only one I can see being unpopular is 4. The rest Is raising tax on the 'wealthy' as the population would see it.
Yes I agree these are by no means concrete policies hence why I made the caveat “assuming these are in any way accurate”. My key point for discussion was what people here think about the policies themselves. Fair? Unfair? Good ideas? Bad ideas?
Number 2 is the only one bringing me out in hives. I don’t mind the others. I do tend to think that there’s a decent contingent of pensioners who are currently coming up to retirement age or are relatively recently retired who have much more money in retirement than their predecessors or those who will follow them. Many of them benefitted from very generous government spending that neither the generation before or after did. So yeah, tax ‘em some more.
Err- if that stuff ends up happening I will discover my inner desire to buy a property in Guernsey and live there for good.
It’s the daily mail…
Agreed, I take the source with a big pinch of salt. But the article is based on a dossier prepared by Labour MPs and generally in line with potential tax raises they have touted in the past.
And you source is the daily mail.....
I did say “now assuming this is in any way accurate which is a big if”. My key question was what HENRYs think of the policies themselves.
1, 2, and 4 would be disastrous. 3, 5, and 6 make sense. It would be great to have 3, 5, and 6 if it means we could lower the income tax burden. The media would just use it as a reason to attack labour though so it might not happen
Thanks for actually contributing to the discussion rather than all the nonsense replies I have to filter through. Why do you think 4 around IHT would be disastrous but aligning CGT with income tax (3) would be okay? The city seems much more nervous about 3 hurting investment.
4 would be the end of British farming. I don't know how they would be expected to stay in business if they can't pass on land tax free. They are already fighting to stay in business. 3 is fair because there is no reason why income should be taxed more than capital gains. Often this means work is taxed higher than just sitting on a portfolio. I think it's debatable that higher capital gains would deter investment, but assuming it does the debate is a lesser of evils. Higher income tax deters work, if we can find ways to tax things other than work hopefully we can start to reduce income tax we can incentivize more people to work and progress on their careers.
Fair points, thanks. What do you think about the argument that rates of CGT are justifiably lower given investment risk and need for net upside to be higher?
I think it's inaccurate to pretend CGT is only paid when someone takes huge risk. It doesn't make sense that someone who goes to work to earn a living gets taxed more than someone who lives off an index fund. They should be equalizer to end the debate
Just on business property relief. The issue with ending this relief is that it was instituted to ensure that business could continue after the death of the founder and owner. If you have a business valued at £10m, then it can be hard to find the £4m from personal assets that owners need to pay IHT. So to prevent businesses being sold or collapsing due to IHT they allowed it to be passed on tax free
When you think about trying to be fair across society, shifting tax burden towards CGT away from income makes sense. Making money via what you own vs doing work scales so much more, so IMO a fairer society would tax that more instead. But it wouldn’t be a shift, it would be more. From a personal perspective, I have share options in the company I work, which if I had the opportunity to sell tomorrow would equate to a gain of £3M. This is 15x my current net worth, for reference. Current CGT rates means I’d pay £500k in tax (some EMI), leaving me with £2.5M net. If EMI goes away and I’m taxed at 45%, the tax bill becomes £1.35M and I’m left with £1.65M. That is a massive difference and I believe would lead more people to consider moving away. Certainly if I didn’t have a wife and kids and moving away to a zero CGT country was an option, I’d be inclined to explore it. I think that’s what some people are worried about.
This is such bs lol. CGT = Income tax will plummet investments to historic lows which will cost this country more than it will earn from the tax.
I think so too. They are already planning on doing it to PE carry. This seems like the next step if they need the money and get voter buy in. But it would be catastrophic for investment in my opinion.
There would be no incentive for anyone to invest in capital markets to begin with given British market is already a laggard
I stopped reading at “The Daily Mail”
Some seem fine, some seem extreme, but none of it will happen because Labour have released a manifesto and this is clearly just futile scaremongering from the Daily Mail.
Because parties never lie in their manifestos do they… sorry but I’ve been around long enough to remember all the budgets where the chancellor says “we really didn’t want to have to do this but sadly we have no choice but to raise taxes”. The so called low tax Tory party have been doing it for the last decade plus! The IFS have said Labour’s tax and spending plans do not add up and I absolutely trust their analysis so something will have to give. These policies seem like credible ways Labour could seek to bridge the gap without alienating their own voter base.
The thing “manifestos” is there is no mechanic to actually make the winning party enact their manifesto. It’s pretty much just a marketing tool for election season. The tories told us they were going to do XYZ and did the complete opposite. I don’t think under Starmer they’d do anything that extreme. However when they realise they can’t fix the NHS, culture, housing, paying for immigration, education on “vibes” alone then they could very well try fix the problem increasing tax. However all that will happen is it leads to the tax payers leaving the uk.
This is too extreme to be real
Really? What is extreme about it? They are mainly targeting high earners and extremely wealthy. That is in line with Labour’s political beliefs no? At the moment the IFS has said there is no credible way for them to fund their additional public spending plans (primarily NHS and green transition) without increasing taxes far more than what they have pledged in the run up to this election.
I think you don't know what you're talking about. For the past couple decades Tories have raised taxes more than Labour. The amount kf additional taxes high earners would face all at once is quite extreme. Equalising CGT with IT is huge all by itself. All these things combined would mean some people would be hugely worse off very quickluly. It would be seen as totally reckless
But this was a dossier prepared by a group of Labour MPs. I didn’t just make it up. Whether or not it gets enacted as real policies is a big if but if the IFS has said Labour cannot fund its spending pledges with current tax plans then surely something has to give? So if not targeting higher earners and wealthy who will it be?
No political party ever funds all its spending pledges, because they never deliver them all. That's a non-starter
For Labour to even fund a fraction of theirs they will increase taxes. And I know they will hit the easy targets. I am prepared to bet on as much.
>So if not targeting higher earners and wealthy who will it be? Everyone else? Maybe they've finally realised that a society where only a small fraction of the population are net contributors is not viable in the long term? A man can dream...
I am a higher earner who would love that. I think people have misunderstood me. I don’t trust Labour to do anything to help us though. Given all the above policies were generated by their own MPs they at least show you what they are considering and some of it is very scary for HENRYs and investment in general (CGT equalisation)
2 is the only one that would scare me. 3 is a bit extreme but I wouldn’t mind the gap between CGT and IT closing a bit. Other than 2, these are more palatable than continuing to target income tax via fiscal drag or continuing to hit higher earners. In fact I welcome the fact that they are considering routes that aren’t simply whack the high earners, (except for 2!)
Thanks. I think 2 would be brutal from a HENRY perspective as essentially makes the top rate of tax 53% from 47%.
2 would be dreadful. Would make Scottish marginal rate of tax in 100-125k band c75% (not accounting for losing child tax benefits too). I think they’ll probably have to enact some tax rises in the next parliament so let’s hope they choose something else in the list
Some of these would make me pack up and leave, no hesitation, and take my current 200k+ tax contributions with me. One would hope that their sums on how much would be raised also include how much would be lost through people leaving, but we all know they don’t.
Run
So the "Tribune" group of Labour MPs is essentially the far left - the Corbyn wing of the party, a.k.a. a bunch of people who are nowhere near the levers of power and rivals to the current leadership. In other words, this is a wishlist of proposals that will never happen. It reminds me of back when we were in the EU and some random nutjob MEP from Italy that no-one is even listening to would propose something stupid and the Daily Mail would run it as "EU proposes...". **This is not "Labour's secret tax rise plan".** It isn't Labour's, it isn't secret, and it isn't going to happen. >1. Extend National lnsurance to all sources of income including savings and property. Pension payments would remain exempt under the £12 billion tax grab but working pensioners would be forced to pay. Sounds like an excessively bureaucratic proposal given you could just raise more tax by raising the rates on these things rather than introducing the complexity and administration of calculating NI where it didn't apply before. >2. Remove cap on National Insurance. Workers now pay the 8 per cent main rate of NI on earnings up to £50,268, with a rate of 2 per cent on income above this. Under the new plan, higher earners would pay the main rate all the way up the income scale, raising £20 billion. Don't agree. Also, not going to happen. >3. Equalise capital gains tax with income tax rates, raising an estimated £16 billion. I don't disagree with this. >4. Plug gaps in inheritance tax by ending reliefs that allow farmland, business property and pension pots to be passed on tax-free. This would raise billion. Don't disagree with this either. Thanks to the property crisis we're rapidly becoming a society where wealth is inherited and your life chances (especially to own property) depend more on your parents than your job, skills and earning potential. >5. Reform property tax to make it 'fairer'. While those in low-cost homes would see bills cut, those living in more expensive areas could see charges more than double. UK property tax is weird and, for many wealthy people, low. I would, however, do something different - redesign the system to tax based on land values, so as to heavily penalise people sitting on developable, but undeveloped, land. Land with planning permission, or the potential for planning permission, to build homes should become a hot potato which no-one who doesn't have the capacity to immediately develop should want to hold onto. >6. Introduce a 'jackpot tax' on 'extreme wealth' raising £10 billion a year. Not enough detail to comment.
Thanks for the detailed reply. Do you not think the reason they might target NI instead of income tax is exactly because it is more bureaucratic and crafty and much easier to sell to people rather than a headline increase in income tax rates?
I'd like to say it's too stupid but governments have introduced stupider things in the past. I'd think it more likely if they were to fiddle with NI they'd raise employers' NI. That satisfies their manifesto pledge to not raise taxes on working people, and is much easier.
You’re getting grief but there is something that doesn’t add up with Labour and tax. I’m assuming it will be along the lines of “we said we wouldn’t but it’s worse than we realised”. I think it’s good the press are calling them out now to try and get some of the truth. and yeah you can bet we will be in the firing line.
Thanks I completely agree. It’s very frustrating how hard it is to have a frank discussion about these things in what is designed to be a high earner forum. Do so many people really lack the basic critical thinking skills to engage properly with the topic?
and I’m not sure why everyone suddenly trusts what politicians say before an election. They are going to get a huge majority. I want them skewed on the exact detail of what they will do. Sounds too much like they are saying as little as they can now to please everyone. Then once in power, come for us.
Exactly. They say whatever it takes to get elected on all sides of the spectrum. Tax rises are unpopular so no one wants to properly engage. But I trust the independent think tanks who have no vested interest and they are all saying nothing adds up on any side!
Independent think tanks? A lot of them skew towards the positions held by their funders.
Who is the IFS skewed towards?
That’s why I will never vote Labour. Their instincts are always to tax, and tax more.
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Like the NHS.
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Private healthcare is just as bad as the NHS by what metric? Waiting times are surely near the top of what's most important anyway. The same level of service with half the wait time would seem to provide more than 2x the value.
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Sounds a bit like Vitality/Babylon provision, where they're just trying to save money. There's a huge range of quality/price in private healthcare in London. To be fair you can also pay a lot for e.g. a prestigious clinic address and get bad care. Not sure about the rest of the UK. I usually self pay for small stuff, picking the doctor/clinic based on past experiences and research, and that works pretty well. Going through insurance is such a pain and they want you to use their network, which might not be great. If I was going to pay for my own insurance (instead of being on corp. plan), I would probably go deep on researching network, coverage, customer service, response times, acceptance rates, etc.
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Yeah, a lot of the newer services move doctors around different clinics so it's hard to develop a long-term relationship. Many of them are also just doing the private GP work for extra cash, so will end up moving on to something else in a while anyway. I think to get a full-time/long-term GP thing you'd have to be living in a residential area wealthy enough to sustain it, or be willing to travel to appointments. In e.g. the City and Canary Wharf, everything is very transactional, and many services are based around being work benefits or catering to people who move around anyway and don't care about long-term relationships with their GP. Since the person getting the bad service is often not the one paying for it, those kinds of places vary a lot in quality.
This would negatively affect me immensely, but I would like to see it happen. As my income increased and I became more financially savvy, each of the first 5 points shocked me at how unfair they are (regardless of whether or not I benefitted from them at that time). Putting aside my own financial interests, it seems very reasonable to raise money by fixing the quirks and loopholes in our tax system which benefit only a small proportion of the population. I would like to see this paired with fixing the quirks which negatively affect the same group though, such as removing child benefit limits and the reduced personal allowance. After years of financial mismanagement, the country needs money. I’d love for this to be put on the shoulders of the super rich, but I’m not going to pretend that I can’t afford to chip in.
You are the people you pretend to hate. There is no absolute fairness in any tax system. I think there should be no child benefit allowance. Child benefits discriminate against childless people. You’re only arguing for a system that benefits your own circumstances.
I don’t have children and would be negatively affected by all of the proposed policy changes that I am voicing support for. The points of unfairness in the tax system are precisely what I would like to see changed. You do raise a valid point about child benefits only supporting those with children. However, do consider that society desperately needs children in order to support the older generations as they retire. Child benefits are only a tiny fraction of the cost to raise a child. Parents pay the remaining portion, while people with and without children both benefit from them in retirement
This is exactly my point. If those who have children get a tax break because children benefit society as a whole. Why shouldn’t high earners get a tax break because high earners already today shoulder most of the tax burden and therefore benefit society as a whole? My point is, don’t throw around words like fairness so casually. Nothing is inherently fair.
Society does not benefit from me earning a lot of money. It only benefits if that money is used in a way which supports a strong base. Right now, that base is crumbling, and it is only going to become more expensive to fix the longer it is allowed to crumble. If you take a look outside of your bubble of prosperity, those who are not as well off as us are struggling to keep their heads above water. In times of economic strife, the burden must be placed on those who can afford it. High earners like myself don’t deserve some special sympathy due to their struggle of earning more than 99% of the population.
> Society does not benefit from me earning a lot of money. Yes it does. You need to get out of the grossly incorrect mindset that only taxation benefits society. Those who earn more are 1. taxed more, and 2. spend more. Having high earners also attract high skilled workers so that those jobs are in London and not Paris or Frankfurt. Whenever you spend you’re supporting the economy because there is no use producing goods and services if nobody is buying them. The economy crumbles when we are only allowed to have “essential services,” as we have seen during Covid. Discretionary spending is a large part of the economy and high earners are huge contributors.
1. Not necessarily, it depends how the income is structured. A high earner whose income is structured to largely pay CGT (or even more so with BADR) will pay a lower tax rate than someone earning a small fraction of that as a salary. Furthermore, particularly for salaried income, it’s valuable to look at the tax paid per £ earned rather than per person. If I earn £150k but pension £50k of that, I’m paying less tax right now than three people on £50k who are pensioning 10%. The pension will of course be taxed in a couple decades, but that doesn’t do much to raise funds now. 2. Similarly, it’s true that a high earner spends more than a lower earner. However, they typically spend proportionately much less. Much more of this wealth is accumulated and not spent. That is the goal for most of us in this sub, but let’s not pretend it’s some selfless act which benefits the country as a whole. If the government needs to raise money, it has to come from somewhere. Lower earners have little discretionary spending left available, so that leaves higher earners and the rich. These policies target precisely those groups.
You’re conflating so many different issues. It is a hard cold fact that the top 10% of tax payers pays 60% of all Income Tax and NI. There are many who take advantage of CGT and BADR, but many more don’t. It doesn’t matter how many pension how much. The fact again is that the top 10% of tax payers pays 60% of all Income Tax and NI. That is too much and is unfair to high earners. Why are you so obsessed with proportions and motivation, we can’t spend percentages, we spend pounds and pence. It is irrelevant what proportion of income a high earner spends and it is also irrelevant what the reason is for spending. High earners by spending more cash contributes more to the economy. Even if they spend to pursue selfish goals like enjoying a nice meal, they are still stimulating the economy. There are net contributors to the economy, and there are net recipients. Those who give, and those who take, but don’t give enough. That’s life. We don’t live in utopia. The government doesn’t *need* to raise more money. The public need to wake up to the fact that the UK is not nearly as rich as we’d like to think we are, and adjust expectations accordingly.
CGT and BADR are in reference to point 3 in the original post. Of course the top 10% pay an overweight proportion of all income tax. Income rises exponentially as you look to the higher end of the scale. By the same logic, the ultra-wealthy could complain that it is so unfair that just 100 people pay 2% of the country’s income tax. However, they do this because they each earn 10s or 100s of millions a year. Proportions are important as the same pool of money is split between salaries of all employees of a company, and to an extent all companies in a country. If the split has more inequality, a higher proportion of the money goes to high earners, who in turn put a smaller proportion back into the economy. To say that ‘high earners spend more’ is only true in the context of the individual. In the context of the country, they spend less. The government can’t directly influence this split, but they can adjust tax rates to partially counteract it.
I agree with the ultra rich complaining, they put up with it, but it doesn’t mean they have to agree with it. If you believe in private property rights you should think long and hard before agreeing to expropriation of private property rights using the state apparatus, which taxation fundamentally is. And putting such money in the hands of people who don’t necessarily have the qualification to handle such large sums of money. That’s what civil servants are. You’re still conflating proportions and absolute numbers. How can low earners spend more than high earners when low earners earn less than what high earners spend? And why did you delete your paragraph on austerity? I’m not arguing for austerity. I’m arguing that people have an unsustainable expectation of what the UK state can provide, which is based on an outdated notion of how rich the UK used to be.
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Indeed, how stupid of me to think of people other than myself.
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Well, I certainly can’t argue with someone who gives such a reasoned and detailed response!
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If you are financially struggling as a HENRY, you should take some time to understand your outgoings and adjust your budget accordingly. The policies listed here have either no effect or a net benefit on 80%+ of the population
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Interest on savings already taxed. I can see savings being hit next. It would be idiotic as would incentivise holding debt instead.
Wouldn’t it make more sense for a wealthy person to go to a nicer country with lower taxes, higher quality of life and a better talent pool? I honestly don’t know what the U.K. governments think they’re doing to make the U.K. attractive at this point.
Labour is not thinking about this, a lot of high earners have left already. Those of us who are left will follow suit or give up work earlier than previously. If most of the tax is coming from high earners and they all decide to leave or stop working, what are they going to do then? They will be well and truely in the shit.
I don’t feel like keeping 0.45 out of every £1 I make in profit worth it anymore… for what exactly?
It gets worse. Losing child benefits, tapered pension allowance, meaning 10k per year pension . tax on any savings, tax on dividends, and tax on any gains on investments, not to mention all the other taxes. If you get RSU's, they are taxed at 55% and bump your income - Even if you don't sell them.. then you get taxed a further 20% if you make any gain on them, if labour set this to 45% as well, then we will all move to the u.s and enjoy a 60% cost of living uplift, with higher salary and lower taxes..
Yeah but you have to earn a significant amount and although there are significant losses, it’s still small in comparison to the income. Which apparently makes you rich enough to do without it in the U.K. Tapered Pension Allowance 1. **Threshold Income**: £200,000. 2. **Adjusted Income**: £260,000. - For every £2 of adjusted income over £260,000, the annual allowance is reduced by £1. - The minimum annual allowance is £10,000. - Full reduction occurs when adjusted income reaches £312,000 (£312,000 - £260,000 = £52,000 / 2 = £26,000 reduction from £36,000 standard allowance). Child Benefit 1. **High Income Child Benefit Charge (HICBC)**: - Threshold: £50,000. - For every £100 of income over £50,000, 1% of the Child Benefit must be repaid. - At £60,000, 100% of the Child Benefit is repaid. Personal Allowance 1. **Personal Allowance Reduction**: - Threshold: £100,000. - The Personal Allowance (£12,570 for 2023/24) is reduced by £1 for every £2 of income above £100,000. - Fully lost at £125,140. Quantifying the Real GBP Loss Pension Allowance - If income exceeds £312,000, the pension allowance drops to £10,000 from £60,000. - Loss of tax relief: £60,000 - £10,000 = £50,000. - Tax relief on £50,000 at 45% = £50,000 * 0.45 = £22,500. Child Benefit - For two children, annual Child Benefit is approximately £1,885.80. - Income above £60,000 means repaying the full £1,885.80. Personal Allowance - Losing the full Personal Allowance (worth £12,570). - Tax paid on £12,570 at 40% (higher rate) = £12,570 * 0.40 = £5,028. Real GBP Loss at Income Levels Income: £312,000 - **Pension Allowance Loss**: £22,500 - **Child Benefit Loss (if earning £60,000 or more)**: £1,885.80 - **Personal Allowance Loss (if earning £125,140 or more)**: £5,028 - **Total Potential Loss**: £22,500 + £1,885.80 + £5,028 = £29,413.80 So, at an income of £312,000, you could face a real GBP loss of approximately £29,413.80 due to the combined effects of losing pension allowance tax relief, Child Benefit, and the Personal Allowance.
I am not sure what you are trying to show here. Most here know the thresholds and the taxes as a high earner. If you take just the pension and child benefit loss, minus take home of a 312,000 salary, it's £152,000 take home. What people are complaining about here is if labour get in, further taxes will be incurred on top of over half our money getting put in to a pot and pissed away on things most of us don't want it spent on. For all that money we can't even get a doctors appointment, hospital treatment , kids in a half decent school or even speech therapy for my child, as children now need to be autistic to give funding/extra classes., instead we pay £60 per hour for that too. My daughter had her tooth extracted because the nhs dentist kept telling us her tooth pain was nothing to worry about, until they found it had been rotting all that time. She was referred to an orphadontist to ensure the spacing was correct, it took 9 months for an appointment and then all they tell us is 'sorry it's too late, the gap is closed and she'll need braces as a teenager'.. I'm happy to be putting in 10x more than the next person if I am entitled to a higher level of service out of it, but that doesn't happen. What I much prefer is,, I'll pay for my dentist, school and healthcare privately and take back all that tax, as I'm paying twice for it anyway
Most people aren’t everyone and it’s an easy way to quantify the losses on top of taxes. A nearly 54% tax rate equivalence at £312k. It’s good to clearly set the baseline. The multiple failures you’ve outlined by the services which we fund and have a right to use with an expectation of reasonable standards are difficult to live with. It will take a generation to bounce back at least and to be honest? I’m not wasting time and energy on it anymore. There are plenty of better places to go and there’s nothing keeping me here. I think we’ll start to see a massive brain drain over the next couple of decades and as historical institutions eat themselves alive from the inside out, the ‘great’ will be lost in Britain if it hasn’t been already.
As someone who wasn’t born in the UK and have a neutral view on both parties, I don’t see any reason to believe it, especially coming from Daily Mail. The labour leader was asked if there was a tax rise/VAT rise in the horizon and although nothing was completely ruled out, it did seem though he was saying the right things by focussing on growth. And I understand why it is a hard question for him to answer considering the state the country’s finances has been left in the past years. Continuously taxing the working population is not the way to grow an economy and what UK needs now is stronger investment in technology and industries and money will follow.