In anticipation of the forthcoming budget, Wealth Club surveyed its affluent clients on policies they would implement if given the chance.
- Combining National Insurance and Income Tax into a unified, higher-income tax was a popular suggestion.
- Reducing employers’ National Insurance for specific groups to promote employment was frequently mentioned.
- Scrapping taxes that generate less than £1 billion annually was another unconventional proposal.
- Reintroducing tax-free shopping for tourists was seen as a way to boost spending.
- Unfreezing tax thresholds to align with inflation drew significant attention.
In anticipation of the forthcoming budget, Wealth Club surveyed its affluent clients on policies they would implement if given the chance. Among the prominent suggestions was the idea of combining National Insurance and Income Tax into a singular, higher income tax. Currently, employees are subject to deductions for both taxes, which can significantly reduce their take-home pay. The proposed consolidation aims to eliminate National Insurance contributions for employees while offsetting this with a higher income tax that would cover all income sources, including pensions and rental income, thereby simplifying the tax structure.
Another noteworthy suggestion involved reducing employers’ National Insurance contributions for targeted groups where the government seeks to increase employment, such as individuals over retirement age or those with disabilities. By raising the threshold or reducing rates, the initiative could encourage businesses to hire more people from underrepresented groups, addressing workforce inclusivity.
Several investors advocated for the abolition of taxes raising less than £1 billion annually. These low-yield taxes are often deemed inefficient, as the cost of administration may outweigh the revenue they generate. By eliminating these taxes and increasing rates on more substantial levies, the proposal seeks to streamline the system and minimise the complexity for individuals and businesses.
Reintroducing tax-free shopping for tourists was another recurring suggestion. This initiative was abolished post-Brexit, yet investors believe reinstating it could enhance the UK’s appeal as a shopping destination. Although the previous scheme predominantly benefited London and select outlets, a new, well-regulated system could potentially distribute benefits more evenly across the country.
Lastly, the idea of unfreezing tax thresholds by aligning them with inflation was a common appeal. Long-term freezing of tax allowances has led to what is known as ‘fiscal drag’, disproportionately affecting high-net-worth individuals who face various taxes such as income, capital gains, and inheritance taxes. Adjusting these thresholds could alleviate the growing tax burden and promote fairness.
These suggestions reflect a shared desire for a simplified and fairer tax system.
