Little divides Labour and the Tories on fiscal policy
Jack Barnett in the Times says there is "little that divides" Labour and the Conservatives on fiscal policy as polling day nears, with both parties having ruled out increases to income tax, National Insurance and VAT. He goes on to say that there is a consensus between the two sides there is about £6bn to be had through clamping down on tax avoidance. Labour has promised to inject £855m into HMRC's budget to cut tax avoidance, while the Conservatives have also suggested that they will increase resources for the tax office. Dan Neidle, the founder of Tax Policy Associates, comments: "We can say with some confidence that neither Labour nor the Conservatives can raise £6bn from clamping down on tax avoidance, because there probably isn't £6bn of tax avoidance," while Stuart Adam, senior economist at the Institute for Fiscal Studies, argues that "it is plausible that the next government could raise some revenue by further reducing the tax gap. But it is easier said than done." Meanwhile, Stephen Relf, technical manager in taxes at the ICAEW, said that the incoming government would need to simplify the tax system "as it is far too complicated."
The Times
Tax at 70-year high and unlikely to fall
Harvey Jones in the Sunday Express says that while Labour is expected to increase taxes if it wins power, the Conservatives have already driven tax bills to a 70-year high, dragging millions more into HMRC's net by freezing thresholds. The number of people paying income tax has increased by 4.5m in the past three years, with 6.3m now paying the higher rate of 40% income tax. Additionally, the number of people paying the additional rate of 45% tax has more than doubled to 1.13m. Inheritance tax receipts have also hit new highs, with families expected to pay £8.4bn this year. Capital gains tax and tax on savings interest have also seen significant increases. Considering the impact of fiscal drag and threshold freezes, Rachael Griffin of Quilter says: "The Treasury's coffers will be topped up exponentially as more and more people are pulled in." Nicholas Hyett of Wealth Club notes that neither of the major parties looks likely to unfreeze the tax bands after the election.
Sunday Express
Uncertainty over global tax rights deal
Plans to reallocate more of the taxing rights on the biggest, most profitable multinationals to the countries where their consumers are is at risk of collapse as a global deal has yet to be agreed. Officials from 127 countries and jurisdictions had aimed to agree on the terms of the new multilateral treaty by the end of June in order to sign it as soon as possible. In the absence of an agreement, a standstill deal on national digital services taxes could expire as June comes to an end. It has been suggested that the deal could yet be agreed if the US includes the treaty's ratification as part of an overhaul of the US tax code due next year. If efforts to deliver the global treaty fail, the EU could proceed with a bloc-wide digital service tax and other countries could follow suit. This, it is argued, could further complicate multinationals' cross-border tax obligations.
Daily Mail
Britons favour tax increases to boost public services
Twice as many Britons support tax increases to pay for public services compared to those who believe in reducing taxes, even if it means further cuts to public services. A poll by abrdn Financial Fairness Trust found that despite 39% of households facing serious financial difficulties, the public is willing to support policies that may not directly benefit their own finances. About a third of the respondents supported tax increases if it meant providing benefits such as free childcare, cheaper energy tariffs, and increased child benefit for others. The report also highlighted that the number of households in financial distress has increased by 2.9m since the last election, in 2019.
The Guardian
Ministers may look at loopholes to increase tax take
Lily Russell-Jones in the Sunday Times says that as a new government may overhaul the complex tax system, it is important to make the most of existing loopholes. Noting that the UK tax code is estimated to be 20m words long and is one of the most complicated in the world, she says there are over 1,180 different types of tax relief, but many people are unaware of them. Looking ahead, Robert Palmer from campaign group Tax Justice UK says: “Our tax system is riddled with loopholes, many of which are surprising, historic and hard to justify," adding: "If Labour wins the election it will need to find more money for public finances — closing tax loopholes is an obvious way to do this.”
The Sunday Times
