Blitz Bureau
LONDON: Sixty of the wealthiest people in the UK collectively contributed more than £3bn a year in income tax, according to The BBC. Each of the 60 individuals had an income of at least £50m a year in 2021/22, but many will have earned far more and probably pay large amounts in other taxes too.
The Institute for Fiscal Studies says these numbers show how reliant the tax system is on a small number of individuals. There is concern tax rises in this month’s Budget could prompt an exit of the superrich, hurting UK finances. Labour ruled out income tax inchanges, but Chancellor Rachel Reeves left the door open for other tax hikes.
A Treasury spokesperson said the government was committed to “addressing unfairness in the tax system”. The amount of income tax the individuals paid is roughly equivalent to around two-thirds of Labour’s entire additional spending commitments in their manifesto earlier this year.
Swiss banking giant UBS predicted in July the UK would lose half a million of its millionaires by 2028, partly as a result of some switching to low-tax countries.
The IFS said the Treasury needed to be aware that a small number of this super-rich group leaving the country would create a “relatively big hole in its finances”. But the Green Party argued claims taxing the wealthy more would lead to them leaving the UK were not credible.
The BBC reported last month about concerns within the Treasury that one of the main fundraisers for those pledges, the scrapping of the non-dom scheme, would raise far less money than first hoped. Scrapping that scheme, which allows a UK resident to be registered abroad for tax purposes, was initially thought to be worth £1bn. Government ministers have also said the previous Conservative government left a £22bn “black hole” in the public finances.
This has led to discussions within government about potential tax increases in the forthcoming Budget and in August the chancellor refused to rule out an increase in capital gains tax. Stuart Adam, a senior economist at the IFS, said reports of wealthy individuals leaving the UK were currently just anecdotal.
