The High Income Child Benefit Charge provides for Child Benefit to be clawed back through the tax system from families where the highest earner has an income in excess of £50,000.
A Westminster Hall debate on the ‘Potential merits of introducing new wealth taxes’ has been scheduled for 14 June 2022 2.30-4pm. The debate has been initiated by Richard Burgon MP.
The UK tax system does not include a tax on the stock of someone’s wealth, although assets and wealth may be taxed in certain circumstances: for example, the purchase of property may be subject to stamp duty land tax, the gains made by the sale of assets may be subject to capital gains tax, and the value of someone’s estate at the time of their death may be liable to inheritance tax.
In September 2021 Richard Burgon MP tabled an early day motion calling on the Government to “introduce a wealth tax as a progressive alternative to raising taxes on working people”, noting that “the UK Wealth Commission, made up of a team of over 50 experts on tax policy, concluded in their December 2020 report that a wealth tax would be preferential to raising taxes on incomes.” The motion was signed by 43 MPs.
In answer to a parliamentary question in November 2021 the Financial Secretary to the Treasury Lucy Frazer set out the Government’s position on introducing new taxes on wealth. The Minister said, “the Government is committed to a fair tax system in which those with the most contribute the most. The UK already taxes assets and wealth across many different economic activities, including the acquisition, holding, transfer and disposal of assets, and income derived from assets.” She went on to note, “the Wealth Tax Commission … found that if considering Inheritance Tax, Capital Gains Tax, Stamp Duty and Stamp Duty Land Tax, the UK is among the top of the G7 countries for wealth taxes as a percentage of total wealth.”
In answer to a subsequent parliamentary question on this issue in February 2022 the Minister observed that the Wealth Tax Commission had concluded that an annual wealth tax “would not be effective because of high administrative costs relative to revenue, and because it would be easy to avoid paying the tax.” In its report the Commission had made a suggestion for a potential one-off wealth tax, and the Minister argued that this “would be a complex undertaking, and the amount of revenue raised would be highly dependent on the final design of the tax.”
A wealth tax could create an emergency fund to get people through this crisis, Richard Burgon MP, Labour List, 11 May 2022
Wealth Taxes in Europe, Tax Foundation, 19 April 2022
An Economic Perspective on Wealth Taxes, US Congressional Research Service, 1 April 2022
Solidarity and wealth tax, European Parliamentary Research Service, April 2022
How to introduce a radical wealth tax, Official Monetary and Financial Institutions Forum, 23 March 2022
When taxing the rich, how about a little carrot to go with the stick? Mark Littlewood, The Times, 21 February 2022
Taxes On Wealth – The Global Landscape, Charles Russel Speechlys, 2 February 2022
The historical origins of wealth taxation, Journal of European Public Policy, 29(5) 2022
Rightfully rewarded? Reforming taxes on work and wealth, Bright Blue, 2022
World Inequality Report, World Inequality Lab, Dec 2021. See, in particular, chapters 7 & 8
Fiscal Studies Special Issue on a Wealth Tax: Time for Another Look? Fiscal Studies, October 2021
The case for an annual wealth tax in the UK, University of Greenwich, Greenwich Papers in Political Economy, 2021
Taxing our wealth, Journal of Economic Perspectives 35(1) Winter 2021
What are the barriers to taxing wealth? The case of a wealth tax proposal in the UK, Journal of Social Policy, 2021
Why did some earlier wealth taxes fail and could this time be different? Economics Observatory, December 2020
A Wealth Tax Commission for the UK, Wealth Tax Commission, 2020
The Role and Design of Net Wealth Taxes in the OECD , OECD, 2018
Why was a wealth tax for the UK abandoned? Lessons for the policy process and tackling wealth inequality, Howard Glennerster, Journal of Social Policy 41(2) 2012
House of Commons Library publications on the rising cost of living in the UK, including causes of inflation, the effect on households, and Government support.
Since the 1990s, UK governments have had debt and borrowing targets. Here we look at the UK's fiscal targets and wider policy for managing the public finances.