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Tax take from savers greater than ‘sin taxes’

Tax revenue collected from homeowners and savers will exceed taxes from tobacco and alcohol within two years by the end of 2016, according to Treasury estimates.

The Daily Telegraph reports that by the end of the 2015/16 financial year, inheritance tax, stamp duty land tax and stamp duty on shares are set to recoup £21.9bn in revenue; compared with £21bn from alcohol and tobacco; the so-called sin taxes.

Senior Tory MPs have urged Chancellor George Osborne to reform the tax system to offer more help for those who save and own their own homes.

One such measure would be to raise the inheritance tax threshold from £325,000 to £1m, a Tory pledge from the last election that was met with opposition by the Liberal Democrats.

MPs and brokers have also called for a reform to the current stamp duty system since a rising UK housing market in some parts of the UK has pulled many more homes over the £125,000 threshold.

Under the current system, homebuyers pay 1 per cent stamp duty for properties valued between £125,001 and £250,000. Homes priced between £250,001 and £500,000 are levied at 3 per cent of the total value, and above £500,001 the tax rises to 4 per cent of the total value.

MPs have called for this to be changed to a progressive tax, where the increased levy is only applied to the value between two price bands i.e. 1 per cent taxed between £125,001 and £250,000, 3 per cent between £250,001 and £500,000 and so on.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Money Guidance CIC 24th June 2014 at 9:21 am

    Er £1bn ?

  2. Ian ian@pwwpl.com 24th June 2014 at 9:27 am

    There are going to be very few households who will have £1 bn of assets.

    Perhaps a typo?

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