While the Chancellor of the Exchequer has assured the public that there will be no further tax rises during this Parliamentary term, our recent Parameters survey reveals a different expectation among paraplanners.
86% of respondents believe that the Government will introduce additional tax increases, with concerns over fiscal responsibility, economic challenges, and political realities.
The Chancellor’s pledge was viewed as overly optimistic given the mounting fiscal pressures. As one respondent noted, “You have to plan with what politicians do, not what they say.”
Current fiscal policies, such as freezing tax bands and allowances, so subtly increasing tax revenues without overtly raising tax rates, is a tactic respondents believe will continue, describing it as “the easiest way to increase tax without over-annoying the electorate”.
Brexit’s long-term impact on the economy was cited as a key factor affecting the Government’s tax inflows. Several respondents pointed out that ongoing disruptions to trade, labour markets, and supply chains will continue to strain the UK economy. These pressures are compounded by global developments, including potential tariffs from the United States under the future Trump administration. These challenges could necessitate further tax measures to prevent the erosion of public services and balance the books.
One respondent observed that while there might be small “giveaways” in upcoming budgets, these are unlikely to offset the broader trajectory of increasing taxes through indirect means.
Pension tax relief was one area seen as a target for reform, framed not as a tax hike, rather it “could be spun” as a reduction in benefits for higher earners.
Paraplanners see policies like the increased Employers’ National Insurance Contributions (NICs) as having a significant impact. “I see it having a massive impact on small businesses and charities,” one respondent said.
Uncertain road ahead
And many respondents expressed doubt that the current tax framework is sustainable. “I think the long-term effects of the current tax changes are yet to be fully felt – I don’t believe for a second there won’t be further rises in 4-5 years,” said one paraplanner. Another predicted, “They will find some excuse or loophole, the same way they did with not raising taxes in the manifesto.”
Some professionals were even more candid. “They said there would be no tax rises this time and have continued to mindlessly spend, so I can’t see what else they can do to raise central government revenue.”
Whether through overt increases or indirect measures, the consensus among paraplanners is clear: further tax rises are not a matter of if, but when.
Main image: lucas-davies-iP8ElEhqHeY-unsplash
