Higher earners fear they may be in line for tax rises in the Chancellor’s November Budget as the Government seeks to claw back extra revenue in the wake of the Covid-19 pandemic.
A poll carried out by deVere Group found that 62% of those earning over 75,000 a year were concerned Chancellor Rishi Sunak will be forced to raise taxes, with just 17% stating they were not worried and 21% unsure.
Commenting on the findings, deVere Group CEO Nigel Green, said: “The ‘whatever-it-takes’ Chancellor Rishi Sunak has been pushing hundreds of billions of pounds into the UK economy since March to shield it from the worst effects of the pandemic.
“But now attention is fixed upon the ballooning deficit, which some predict to be a staggering £350bn this year. Due to the magnitude of the funding black hole, it should be expected that taxes will rise and reliefs will be slashed. Potential targets for increases could include income tax for higher earners, capital gains tax, inheritance tax, and VAT.
“There could be new wealth taxes introduced – something Boris Johnson was reportedly mulling even before the pandemic. In addition, it is almost inevitable that pension tax relief will be a target.”
However, Green believes that raising taxes may not be the best way for the country to balance the books and warned that tinkering with taxes may prompt higher earners to explore their options overseas.
Green explains: “In ever more competitive global trade, the UK needs to become increasingly tax competitive. This would fuel economic growth more effectively than tax rises and relief cuts.
“It is likely to be safer politically for the Chancellor to tinker around with taxes rather than make bold moves to boost the UK’s growth and competitive edge.
“Therefore, we should expect to see an increasing number of higher earners in the UK, or those living overseas who have financial links to Britain, exploring international options.”
