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Labour warned on plan for wealth tax

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Would-be Labour leader Owen Smith has come in for criticism over plans to further tax the UK’s richest 1 per cent.

The Financial Times reports Smith wants to impose a 15 per cent tax on income from dividends, rents and investments for those earning more than £150,000 a year from their additional income.

The tax would affect 265,000 people and is expected to raise £2.8bn.

Several European countries such as France, Netherlands and Norway have a policy of targeting the rich, although places such as Germany, Sweden and Luxembourg have shifted away from imposing wealth taxes.

Chartered accountancy Menzies private client tax director Craig Hughes told the newspaper the plan could encourage the UK’s wealthiest to leave.

He says: “These are very internationally mobile people with houses all over the world. If you say to these people, ‘like it or lump it’, they could easily say ‘lump it’ and disappear off.”

Hargreaves Lansdown senior analyst Laith Khalaf says such a tax would come on top of the dividend tax introduced in April on income above £5,000.

He says: “People above that [level do pay dividend tax already, and an additional 15 per cent again would not be welcome.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Hargreaves Lansdown senior analyst Laith Khalaf says such a tax would come on top of the dividend tax introduced in April on income above £5,000.

    He says: “People above that [level do pay dividend tax already, and an additional 15 per cent again would not be welcome.”

    An increasing number of people are finding that trips to the food bank aren’t very welcome either.

  2. Tinker, tinker, tinker, tinker – all around the edges – whilst the big picture often seems to get missed.

    The more complicated things are made, generally the easier it is to avoid the intended outcome and yet the more costly it is for everyone!

    The bottom line is total tax take (and catching those evading tax). Messing around time after time with rates, thresholds etc is (IMO) purely political posturing (i.e. Labours 50% income tax threshold?)

  3. It so often escapes the notice of the Westminster numpties that those earning £100k plus must obviously be worth it. Firms aren’t charities. These people will be contributing significant excesses to their incomes to merit the remuneration As such it follows that they are significant contributors to GDP. They are also probably pretty mobile. So this policy is akin to killing the goose that lays the golden egg. One despairs!

  4. “An increasing number of people are finding that trips to the food bank aren’t very welcome either.”

    The only way of resolving that problem is growing our economy. I’m not sure how scaring off the investors who help to create growth in the economy helps to achieve that.

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