Rachel Reeves is contemplating a rise in capital gains tax rates between 33% and 39% to address funding gaps in public services, as models indicate a significant budget shortfall of up to £25 billion. Officials express concern over the limited avenues for tax increases, especially with promises to avoid raising income tax and national insurance. While some plans targeting the wealthy may fall short of expectations, urgency mounts to find workable solutions before the approaching budget deadline.
Treasury sources disclose that amidst rising pressures, significant tax decisions are delayed. Despite official denials of disarray within tax-raising strategies, there are doubts regarding proposals aimed at high-net-worth individuals, with fears they might drive wealth out of the UK rather than increase revenue. This leads to heightened anxiety over meeting the budgetary needs against a backdrop of political commitments to maintain existing tax thresholds for low and middle-income earners.
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