Chancellor Rachel Reeves has suggested she could introduce tax hikes in the upcoming budget, and target them at assets instead of wealth. The intervention comes just weeks before Ms Reeves is set to deliver her second Budget, as she said that those with the “broadest shoulders” should pay more into the treasury.
She is reported to be ruling out targeting high earners with the raid and instead could be targeting pensions or family homes to plug a growing black hole left after she failed to take the axe to welfare and oversaw rising borrowing costs. Family homes that could be in her sights tend to be owned by those above retirement age. Official data shows that households where the head of the family is aged between 65 and 74 have an average wealth of more than £500,000, the Telegraph reports.
That puts pensioners firmly in the Chancellor’s sights as she looks for ways to raise revenue to compensate for not cutting benefits payments to those who don’t work.
Ms Reeves, speaking to reporters at the International Monerary Fund (IMF) meeting in Washington said: “I do think that those with the broadest shoulders should pay their fair share of tax, and I think you can see that through my actions last year at the Budget.”
The Chancellor was then asked how she woud define someone as being wealthy. She then replied: “Wealth is obviously different from income. So wealth is not about your annual salary.”
And on Thursday, Ms Reeves made it clear she would not be bringing in a targeted wealth tax.
She even signalled that she would avoid driving up bank taxes as she tries to bring back businesses scared off by last year’s record-breaking tax raid.
“We’re not going to be introducing a wealth tax,” she said. “We already have a number of taxes, though, in the UK that do tax wealth and do tax wealthy people, and some of those we did increase in the Budget last year, like putting VAT on private schools, getting rid of the non-domicile status, extended taxes on private jets.”
Ms Reeves defended her tax hikes and said that the “were the right policies in the circumstances that we faced”.
Last October, the Chancellor launched an unpopular rise in inheritance tax, targeting family farms and businesses.
With the Budget on the horizon, pensioners may be next in line for tax hikes as the chancellor looks to find money somewhere, to pay for her increasing spending and borrowing costs.