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Rachel Reeves‘s former boss has suggested Government Amidst this, there is no “coherent” tax strategy. Report that the Chancellor is considering a mansion tax in the next month Budget,
Mervyn King, former governor of Bank of Englandtold Sky News that the problems within the system could not be solved by “just adding another wealth tax to it”.
It has been reported that the Chancellor is considering imposing a tax on high-value properties In next month’s budget.
Lord King ran the Bank of England for 10 years from 2003 to 2013 – where Reeves spent the early part of his career.
Speaking to Sky News on Sunday, he said that ‘there is a lot of scope for improvement in the tax system.’
Pointing to reports surrounding a mansion tax, he said: “Property taxes are [an] Interaction between stamp duty, council tax, capital gains tax, inheritance tax. “You can’t solve that problem by just adding another property tax on it.”
He said he would advise the Chancellor to “set up a group of people who, over 12 months, will look deeply at all aspects of tax treatment – not just on property, but on all types of savings and wealth – to come up with a coherent view of what it should look like.”
“And that doesn’t seem to happen. Whatever happens, happens.” [Office for Budget Responsibility] A number is produced just before the budget… and then they look around to see almost what the idea is written on the back of a fag packet is how you can raise an extra few billion here or a few billion more there.
“This is not a consistent tax strategy, and you can do a lot by thinking about it first.”
Mansion tax proposal could mean more to owners Properties worth at least £2m Any amount above that value faces an annual fee of 1 percent.
It is believed the tax will have the support of left-leaning Labor MPs, but there are concerns within the cabinet about the impact the policy could have on aspirations.
It is understood that several ministerial stalwarts, including Deputy Prime Minister David Lammy and Home Secretary Shabana Mahmood, are among those opposed to such taxes.
The Chancellor is due to deliver this year’s autumn budget at the end of November as she seeks to plug holes in the public finances.
It faces the prospect of being forced to use tax increases or spending cuts to meet its commitments to cover day-to-day spending with tax receipts rather than borrowing additional.
The Labor manifesto also commits to not increasing employee contributions on income tax, VAT or National Insurance.
Independent News broke over the weekend that the Chancellor is coming under pressure for a tax raid on the highest earners.
Ministerial sources have said changes to the top rate of income tax have been discussed within the government, as part of talks on how the budget black hole can be filled.
One source said: “The 45p rate is definitely in play. It would be a popular move within the party.”
The 45p rate is applied at 45 per cent on incomes above £125,140, and is expected to be paid by more than 1.2 million people by the end of the year.
This week, Reeves is leading a UK delegation to Saudi Arabia Attempt to make progress on a trade agreement with the Gulf Cooperation Council.
The first chancellor to visit the Gulf in six years, she will attend the Future Investment Initiative (FII) and meet senior Saudi royals, US administration figures and global business leaders, with a number of announcements on investment expected in the coming days.