UK Budget to hit ‘ordinary workers’ and the economy hard, warns deVere Group
The UK Budget next week could spell financial shock for hundreds of thousands of ordinary families, as chancellor Rachel Reeves appears to be preparing to hike Capital Gains Tax (CGT)
This tax hike, warns the CEO of one of the world’s largest financial organizations, threatens not only individuals’ wealth but also the country’s economic health.
deVere Group’s Nigel Green says: “Capital Gains Tax is due on profits made from the sale of assets such as investment portfolios, property, and businesses.
“Traditionally, it’s been seen as a levy on the wealthiest, but the reality is that many everyday workers will be dragged into paying higher taxes.
“As the government aims to raise up to £35bn, this increase will come at the expense of hardworking people who have prudently saved for their futures.”
He continues: “The notion that this tax is only for the rich is outdated.
“Ordinary middle-class families, entrepreneurs, and even expatriates will be severely impacted by this CGT hike. People who have responsibly planned for their retirement, invested in property, or run successful businesses are set to be penalised for making sound financial decisions.”
With basic rate taxpayers currently facing a 10% CGT rate and higher earners at 20%, the anticipated rise would erode accumulated savings and investments for millions across the UK.
The very families who have been diligent in planning for the future could find their hard-earned wealth chipped away.
In addition to the direct impact on families, deVere Group warns that the CGT increase will have significant long-term consequences for the broader UK economy. By increasing the tax burden on investment returns, the government risks discouraging the very behaviour that drives economic growth.
Nigel Green explains: “The proposed changes will have a chilling effect on investments. When people face higher tax bills on their returns, they’ll think twice before investing in property, pensions, or businesses.
“At a time when the UK economy desperately needs fresh investment to recover from recent economic headwinds, discouraging people from putting their money into growth-generating ventures is short-sighted and harmful.”
Such changes also send a worrying message to overseas investors, particularly expatriates who have long supported the UK economy. With the threat of higher taxes on their UK-based assets, many will reassess their financial commitments to Britain.
“This is a dangerous precedent,” the deVere CEO goes on to add.
“International clients are watching closely, and the message they’re getting is that the UK is no longer as welcoming to overseas investment. The ripple effects could be immense, particularly as global investors seek more favourable tax environments elsewhere.”
The upcoming Budget is poised to introduce a series of tax hikes, but it’s the potential changes to CGT that will be among those which strike at the heart of families’ financial security.
“While the government aims to fill a £22bn hole in public finances, the real cost will be borne by ordinary people who have worked hard to build their future,” he concludes.
