To ask the Chancellor of the Exchequer, with reference to the open letter to the Chancellor from Partners in Progress, published 25 October 2021, if he will introduce a wealth tax on wealth holders.
11 February 2022
The Government is committed to a fair tax system in which those with the most contribute the most. For example, the UK’s progressive Income Tax system means the top 1 per cent of income taxpayers are projected to pay 28 per cent of all Income Tax, and the top 5 per cent are projected to pay 49 per cent in 2021-22.
The UK does not have a wealth tax, but it does have several different taxes on assets and wealth. The UK taxes assets and wealth across many different transactions, including the acquisition, holding, transfer and the disposal of assets, as well as taxing the income derived from holding assets.
In 2020, The Wealth Tax Commission, which has no connection or link to the Government, found that if considering Inheritance Tax, Capital Gains Tax, Stamp Duty, and Stamp Duty Land Tax, the UK is among the top of the G7 countries for wealth taxes as a percentage of total wealth.
The Wealth Tax Commission also concluded that an annual wealth tax, reportedly suggested by the UK branch of the group behind the letter, would not be effective because of high administrative costs relative to revenue, and because it would be easy to avoid paying the tax. The Wealth Tax Commission’s suggestion of a potential one-off wealth tax in the UK would be a complex undertaking, and the amount of revenue raised would be highly dependent on the final design of the tax.
It is also the case that any individual or private business wishing to make a greater contribution to the Exchequer can make voluntary payments to HMRC. More information about how to do so is available on GOV.UK.