By Tanya Jefferies Thisismoney.co.uk
06:00 29-Jun-2023, updated 06:00 29-Jun-2023
- Proposals include cuts to tax-exempt lump-sum pensions for younger generations
- Think tank also proposes imposing inheritance tax on pension pots
- But parents over £50,000 will get their child benefit reinstated
Drastic tax increases on pension savings, inheritance and investments are planned by major think tanks.
Proposed cuts to tax-exempt lump sum pension payments to young people, imposition of inheritance tax on pension pots, and higher capital gains and dividend taxes.
But some unpopular tax measures will also be eliminated in the overhaul outlined in a new report from the Resolution Foundation and Center for Economic Performance.
Rather than reducing or revoking child benefits for parents earning over £50,000, they want to restore child benefits and stop reducing personal tax credits for parents earning over £100,000. I believe.
These measures will leave some households facing staggeringly high marginal tax rates of over 80%.
The Economy 2030 Survey also proposes eliminating the burden of National Insurance payments on pension contributions from individual savers, and instead placing the burden on employers.
The Resolution Foundation and CEP expect the UK tax burden to rise between the 2000s and 2027-28 to be £4200 per household, or nearly 33% to 38% of GDP, or over £1 trillion. there is
But they argue that the increase in the amount of taxation and the quality of taxation do not match.
“During the 2010s and 2020s, there was a mismatch between the rhetoric of tax cuts and the reality of tax increases, leaving little room for a coherent and coherent strategy for taxation,” the report said.
“U-turns and fiscal hoaxes have happened too often, and reform has been sidelined too often. Instead of solving the problem, it has only been exacerbated.”
A complete overview of the proposed tax reform Inquiries about Economy 2030is funded by an independent charitable trust, The Nuffield Foundation, and can be found below.
“This is the latest in a series of think-tank reports supporting a fundamental reform of the UK tax system,” said Tom Selby, head of retirement policy at AJ Bell.
“Some of the key proposals are likely to be unpopular and potentially complex, such as a significant reduction in the amount of tax-free cash someone is entitled to, from the current maximum of £268,275.”
Selby said the Resolution Foundation itself acknowledged that reforming the pension tax exemption would risk “controversial with little increase in short-term earnings.”
“It seems quite unlikely that cutting pension tax-exempt cash entitlements will be a major priority for the next prime minister ahead of the general election.
“However, Chancellor Jeremy Hunt’s decision to abolish the lifetime allowance and move to a cap on pounds and pence of tax-exempt cash rather than linked to the lifetime allowance could open the door for future cuts. Yes, probably by stealth when the pound is abolished.” The tax-free cash limit is 268,275, but cannot increase with inflation.
“Similarly, imposing an inheritance tax on pensions might raise much-needed funding for the Treasury coffers, but could lose votes, especially among traditional Conservative voters.”
“But changing the way national insurance applies to pensions could have more political appeal,” Selby said.
“As it stands, employer pension contributions are free from NI, but employee contributions are not eligible for NI relief. can receive.”
“The Resolution Foundation is proposing to reverse this situation, which could raise billions of pounds for the Treasury, but at a time when many businesses are already in trouble. It would be a glaring challenge for employers to incur extra costs in
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