Middle income workers will carry the painful tax burden of government’s failed non-dom reforms
Middle income workers will carry the painful tax burden of the government’s failed non-dom reforms in the upcoming Budget, say leading audit, tax and business advisory firm, Blick Rothenberg.
Robert Salter, a director at the firm, said: “There are just over 4 weeks to go until the Autumn Budget. To pay for their planned expenses and fill their ‘black hole’ the government needs to get tax revenues up.”
He added: “However, their plan of increasing the tax take by scrapping the non-dom regime is likely to fail. Many non-doms are looking at leaving the UK rather than pay increased taxes after April 2025.”
Robert said: “Without their expected tax income from non-doms, the government will have to look elsewhere. Their only real option will be to increase taxes on middle income earners, despite their pre-election promises not to do this.”
He added: “Given the considerable amount of money the government need to cover their planned expenditure on areas such as education, public sector pay awards, and to fill the alleged £22bn ‘black hole’, that increase could be quite severe.
Robert said: “In the Budget, the chancellor might also:
- Scrap or reduce pension tax relief, which could dissuade long-term pension savings.
- Increase Capital Gains Tax, which currently raises less than 2% of the total tax take.
- Increase Inheritance Tax and National Insurance for higher paid workers.
Meaning UK taxpayers are likely in for a painful budget regardless of how ‘broad’ their shoulders are.”
He added: “Given that the chancellor increased VAT on private school fees and introduced anti-forestalling legislation to prevent people avoiding that VAT increase, it is possible she will introduce her taxation changes immediately from the 30 October without giving taxpayers any time to prepare for them.”
