Which tax rises could the Labour government introduce in the autumn budget?

Published

3 months ago

August 27, 2024

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There’s going to be “a lot of bad news” in the chancellor’s autumn budget – which the prime minister has said will be “painful”.

Speaking from Downing Street, Sir Keir Starmer said the public will have to “accept short-term pain for long-term good“.

Sky’s economics and data editor Ed Conway heard there was going to be “a lot of bad news” in the fiscal event as the government continues to remind voters about its financial inheritance from the Tories, with borrowing at levels not seen since the pandemic.

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Rachel Reeves’s first budget on 30 October will be “quite miserable”, Conway has said – with spending cuts and tax rises both expected.

The latter is something Ms Reeves herself has admitted will be on the cards, though Sir Keir vowed in its election manifesto that income tax, national insurance, and VAT wouldn’t budge – remaking the pledge in August.

With that in mind, Sky News looks at which ones could be targeted.

Inheritance tax

This is one of the taxes most likely to be changed.

Inheritance tax is charged at 40% on the value of an estate above £325,000 when someone dies.

The tax rate could be increased, or the value people have to pay inheritance from could be lowered to raise money.

There are currently several exemptions, including on agricultural land and family businesses, but these could be lifted to include them.

The government could also reduce the number of years allowed when giving away assets before someone dies before inheritance tax kicks in.

A leaked recording from March revealed now chief secretary to the Treasury, Darren Jones, saying inheritance tax could be used to “redistribute wealth” and address “intergenerational equality”.

Capital gains tax

Capital gains is imposed on the profit from the sale of capital assets, including second homes, shares, business assets and most personal possessions worth £6,000 or more, apart from cars.

Currently, people do not have to pay tax on the first £3,000 of profits, or £1,500 for trusts.

The minimum limit could be removed and the tax could be imposed on assets currently exempt.

Like inheritance tax, it is one of the taxes that is being most talked about to be targeted.

Council tax

In the leaked recording from Mr Jones, he said he was frustrated by the “out of date” council tax system and hinted homes worth over £1m may have to pay more.

Former shadow minister Jonathan Ashworth told Sky News during the election campaign that Labour would not change council tax bands.

Council tax is currently set in bands that are based on the 1991 value of homes, which has been branded “absurd” by the Institute for Fiscal Studies (IFS) and “incredibly poorly designed” by the Institute for Government “(IfG).

Gemma Tetlow, chief economist at the IfG, said council tax could be reformed “in a very sensible way… rather than having the banded system you could move to something that is much more proportional tax on land revenue”.

She added: “You could do that sensible structural reform and raise some extra money at the same time.”

Business rates

Labour are understood to be consulting on changing business rates, which are charged on most non-domestic properties with relief for some including small businesses, retail, hospitality and leisure properties.

A change could be made so they are related to the value of the land instead of the current rateable value, which is an estimate of how much it would cost to rent that property for a year in April 2021.

Stamp duty

Stamp duty is paid on the cost of a property over £250,000, with more paid for second homes and by non-UK residents, and relief for first-time buyers.

It currently discourages people from moving home and is part of the reason older people are not moving out of expensive, larger properties.

Labour could change the tax so it is focused on annual land value tax instead of on a transaction – but that could be a hard sell with the party.

UK

Teenage girl killed on M5 in Somerset after getting out of police car named

Published

7 hours ago

November 15, 2024

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Teenage girl killed on M5 in Somerset after getting out of police car named

A teenage girl who was killed after getting out of a police car on the M5 in Somerset has been named.

Tamzin Hall, 17 and from Wellington, was hit by a vehicle that was travelling southbound between junction 24 for Bridgwater and junction 25 for Taunton shortly after 11pm on Monday.

She had exited a police vehicle that had stopped on the northbound side of the motorway while transporting her.

A mandatory referral was made to the Independent Office for Police Conduct, which is now carrying out its own investigation into what happened.

Avon and Somerset Police said: “Our thoughts and sympathies go out to Tamzin’s family for their devastating loss.

“A specially-trained family liaison officer remains in contact with them to keep them updated and to provide support.

“The family have asked for privacy at this difficult time.”

The police watchdog, the IOPC, has been asked to investigate.

In a statement, director David Ford, said: “This was a truly tragic incident and my thoughts are with Tamzin’s family and friends and everyone affected by the events of that evening.

“We are contacting her family to express our sympathies, explain our role, and set out how our investigation will progress. We will keep them fully updated as our investigation continues.”

Paramedics attended the motorway within minutes of the girl being hit but she was pronounced dead at the scene.

The motorway was closed in both directions while investigations took place. It was fully reopened shortly after 11am on Tuesday, Nationals Highways said.

UK

Mohamed al Fayed’s brother Salah also abused women, say female Harrods employees

Published

7 hours ago

November 15, 2024

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Mohamed al Fayed's brother Salah also abused women, say female Harrods employees

A survivors group advocating for women allegedly assaulted by Mohamed al Fayed has said it is “grateful another abuser has been unmasked”, after allegations his brother Salah also participated in the abuse.

Justice for Harrods Survivors says it has “credible evidence” suggesting the sexual abuse allegedly perpetrated at Harrods and the billionaire’s properties “was not limited to Mr al Fayed himself”.

The group’s statement comes after three women told BBC News they were sexually assaulted by al Fayed’s brother, Salah.

One woman said she was raped by Mohamed al Fayed while working at Harrods.

Helen, who has waived her right to anonymity, said she then took a job working for his brother as an escape. She alleges she was drugged and sexually assaulted while working at Salah’s home on Park Lane, London.

Two other women have told the BBC they were taken to Monaco and the South of France, where Salah sexually abused them.

The Justice for Harrod Survivors representatives said: “We are proud to support the survivors of Salah Fayed’s abuse and are committed to achieving justice for them, no matter what it takes.”

The group added it “looks forward to the others on whom we have credible evidence – whether abusers themselves or enablers facilitating that abuse – being exposed in due course”.

Salah was one of the three Fayed brothers who co-owned Harrods.

The business, which was sold to Qatar Holdings when Mohamed al Fayed retired in 2010, has said it “supports the bravery of these women in coming forward”.

A statement issued by the famous store on Thursday evening continued: “We encourage these survivors to come forward and make their claims to the Harrods scheme, where they can apply for compensation, as well as support from a counselling perspective and through an independent survivor advocate.

“We also hope that they are looking at every appropriate avenue to them in their pursuit of justice, whether that be Harrods, the police or the Fayed family and estate.”

The Justice for Harrods Survivors group previously said more than 400 people had contacted them regarding accusations about Mohamed al Fayed, who died last year.

One of those alleged to have been abused is Bianca Gascoigne, the daughter of former England player Paul.

Speaking to Sky News in October, Gascoigne said she was groomed and sexually assaulted by al Fayed when she worked at Harrods as a teenager.

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Wes Streeting ‘crossed the line’ by opposing assisted dying in public, says Labour peer Harriet Harman

Published

7 hours ago

November 15, 2024

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Wes Streeting 'crossed the line' by opposing assisted dying in public, says Labour peer Harriet Harman

Wes Streeting “crossed the line” by opposing assisted dying in public and the argument shouldn’t “come down to resources”, a Labour peer has said.

Speaking on Sky News’ Electoral Dysfunction podcast, Baroness Harriet Harman criticised the health secretary for revealing how he is going to vote on the matter when it comes before parliament later this month.

MPs are being given a free vote, meaning they can side with their conscience and not party lines, so the government is supposed to be staying neutral.

But Mr Streeting has made clear he will vote against legalising assisted dying, citing concerns end-of-life care is not good enough for people to make an informed choice, and that some could feel pressured into the decision to save the NHS money.

He has also ordered a review into the potential costs of changing the law, warning it could come at the expense of other NHS services if implemented.

Baroness Harman said Mr Streeting has “crossed the line in two ways”.

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“He should not have said how he was going to vote, because that breaches neutrality and sends a signal,” she said.

“And secondly… he’s said the problem is that it will cost money to bring in an assisted dying measure, and therefore he will have to cut other services.

“But paradoxically, he also said it would be a slippery slope because people will be forced to bring about their own death in order to save the NHS money. Well, it can’t be doing both things.

“It can’t be both costing the NHS money and saving the NHS money.”

Baroness Harman said the argument “should not come down to resources” as it is a “huge moral issue” affecting “only a tiny number of people”.

She added that people should not mistake Mr Streeting for being “a kind of proxy for Keir Starmer”.

“The government is genuinely neutral and all of those backbenchers, they can vote whichever way they want,” she added.

Prime Minister Sir Keir Starmer has previously expressed support for assisted dying, but it is not clear how he intends to vote on the issue or if he will make his decision public ahead of time.

The cabinet has varying views on the topic, with the likes of Justice Secretary Shabana Mahmood siding with Mr Streeting in her opposition but Energy Secretary Ed Miliband being for it.

The Terminally Ill Adults (End of Life) Bill is being championed by Labour backbencher Kim Leadbeater, who wants to give people with six months left to live the choice to end their lives.

Under her proposals, two independent doctors must confirm a patient is eligible for assisted dying and a High Court judge must give their approval.

The bill will also include punishments of up to 14 years in prison for those who break the law, including coercing someone into ending their own life.

MPs will debate and vote on the legislation on 29 November, in what will be the first Commons vote on assisted dying since 2015, when the proposal was defeated.