Labour is refusing to tell us which taxes it will increase if it wins the general election, but one thing is sure – in its own words, it’s going to be “relentless”, says Harvey Jones.
If Keir Starmer defeats the Tories, he will struggle to meet his spending plans unless it raises a lot more cash for the Treasury. The only question is how Labour goes about it.
As I’ve written before, one likely option is to restore the pensions lifetime allowance, which hits people with a heinous 55 percent tax charge if they save too much for retirement.
Labour is also planning to slap VAT on private school fees and hike taxes on wealth non-doms, although Conservative Party chancellor Jeremy Hunt has now stolen that policy.
The truth is, these policies will only raise a few billion pounds, nowhere near the amount Labour needs to fund its spending plans.
Shadow chancellor Rachel Reeves has promised not to increase income tax and National insurance, that still leaves a host of taxes she could hike.
Options I’ve seen floated include tightening inheritance tax and capital gains tax, cutting tax relief on pensions contributions, smashing second homeowners and even introducing a wealth tax.
As yet, we don’t know what Reeves will do. She’s remaining tight lipped for fear of frightening the voters.
What we do know is that Labour is going to give HM Revenue & Customs a lot more powers to make people pay what they owe. Starmer is not being shy about that.
As I recently warned, HMRC already has wide-ranging powers and can delve deeper into your financial affairs than ever before.
Its super computer HMRC Connect tracks down a staggering amount of information, taking Big Brother surveillance to a completely new level.
HMRC is now beefing it up by adding machine learning artificial intelligence (AI) technology, too. It will compare its data with the information on your tax return, and hone in on any discrepancies.
It’s right that people pay what they owe, with no hiding place. Otherwise honest taxpayers will have to plug the gap.
Yet HMRC’s efforts aren’t enough for Starmer and Reeves. Labour is warning that a lot of tax is still going missing, and it’s going to collect it.
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