Labour is committed to closing tax loopholes for various taxpayer groups in order to generate revenue for the Treasury. Prime Minister Sir Keir Starmer has assured that the upcoming Autumn Budget, which is expected to include tax hikes and spending cuts, will not hinder economic growth. He emphasized the importance of economic stability in fostering growth during a press conference in Italy on Monday.
Starmer’s remarks precede the budget statement scheduled for October 30, where Labour has cautioned that the budget will be challenging due to a projected £22 billion deficit in public finances. Despite the tough decisions ahead, Starmer reiterated that all measures will be taken with the objective of promoting economic growth.
Chancellor Rachel Reeves is anticipated to introduce several tax adjustments aimed at boosting Treasury revenue. The government’s goal is to secure a steady stream of income to reduce record levels of public sector net debt and government borrowing. Failing to address these issues could result in the UK national debt tripling over the next five decades, as warned by the Office of Budget Responsibility.
Labour plans to decrease debt as a percentage of the economy over the next parliamentary term. One of their strategies involves raising £2.6 billion in the next five years by targeting tax loopholes utilized by UK resident non-domiciled individuals. Additionally, Labour aims to enhance the reporting of tax schemes to HMRC under the disclosure of tax avoidance schemes regime.
Capital Gains Tax (CGT) is a key focus for revenue generation, with different tax rates applicable based on income brackets. The government is also targeting individuals who disguise their income as capital gains, with an estimated revenue of £15.2 billion in 2024-2025.
The Confederation of British Industry (CBI) has stressed the importance of maintaining investor confidence amidst the challenging budget environment. Investor certainty is crucial to encourage business investment and growth. Labour’s approach to tax reforms, including CGT, Inheritance Tax, and pension contribution tax reliefs, could potentially raise significant revenue for the government.
Starmer emphasized the significance of borrowing for investment but underscored the importance of strong fiscal rules to prevent unfunded budget policies. The aim is to avoid repeating past mistakes and ensure a sustainable economic strategy moving forward.
These efforts come in the wake of economic stagnation recorded in July, with no GDP growth in June and July. The government remains focused on implementing measures to stimulate economic growth while addressing financial challenges. Please rewrite this sentence.
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