The Resolution Foundation proposes significant tax reforms for Labour’s consideration.
- Inheritance tax reliefs could be scrapped to generate £2 billion annually.
- Aligning capital gains tax rates with income tax might bring £8 billion each year.
- Road pricing is suggested to counteract declining fuel duty revenues.
- Concerns are raised about potential stamp duty changes and their economic impact.
The Resolution Foundation, an influential think tank, has put forward a series of tax reform recommendations for Labour’s upcoming budget considerations. These recommendations aim to address the fiscal challenges the government faces, proposing measures that could significantly boost the Treasury’s revenue streams.
A key proposal involves the removal of inheritance tax reliefs on agricultural property and business assets. The Foundation estimates this move could generate an additional £2 billion annually. This suggestion is part of broader fiscal reforms that Labour might implement to enhance budgetary efficiency under its leadership.
Another significant recommendation is to align capital gains tax rates more closely with those of dividends and wages. By doing so, the government stands to collect an estimated £8 billion more per year. This alignment is seen as a way to ensure a more equitable tax system and bolster government funds.
In response to the growing preference for electric vehicles, which diminishes traditional fuel tax revenues, the Foundation advocates for the introduction of road pricing. This proposal suggests a charge of 6p per mile, plus VAT, to help maintain critical infrastructure funding.
However, concerns have been raised regarding potential changes to stamp duty. The threshold for stamp duty on property transactions is expected to fall from £250,000 to £125,000 in April 2025. This shift could increase the tax burden for buyers and is critiqued as an inefficient method of raising revenue that might inhibit optimal use of the UK’s housing stock.
The recommendations reflect a strategic approach to addressing fiscal challenges and maintaining economic stability.
