Following the publication of HM Revenue and Customs (HMRC) receipts up to June 2018, the amount taken by the taxman in the first quarter of the financial year was £142bn, an increase of approximately £5.2bn year-on-year.
According to NFU Mutual, due to the NHS requiring much more to fund its spending requirements, the prospect of a squeeze on higher earners, landlords and family inheritances looks “increasingly likely”.
NFU Mutual chartered financial planner Sean McCann said that, if the chancellor cannot raise taxes but needs receipts to increase, there are two likely options on the table; either cut tax reliefs or take a more aggressive approach on existing taxes.
“We’ve already seen a crackdown on inheritance tax in the last financial year with a record £5.2bn taken from people’s estates. A more aggressive approach to Capital Gains Tax is likely, particularly as amateur landlords start to jettison buy to let properties following a series of tax changes that make buying and letting out residential property much less lucrative,” McCann added.
“Pension tax relief looks increasingly likely to be slashed at some point soon with either a flat rate of 25 per cent or a reduced annual allowance of £20,000 two possible options. Higher earners are likely to be hit in either scenario but such changes would create serious erosion of public trust and confidence in pensions at a time when people need to be saving more for their future.”
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