Four ways Labour could raise money in the Budget without hiking income tax
Summary
The article outlines tax options Chancellor John Healey could consider to raise revenue in the Budget without increasing income tax, VAT or National Insurance rates. The excerpt discusses higher taxes on banks and gambling machines, and requiring online marketplaces to collect VAT.Key Facts
- Economists estimate the government’s fiscal headroom may have fallen from about £24bn to as little as £11bn in six months, partly because borrowing costs have risen.
- Labour’s 2024 election manifesto pledged not to raise the rates of income tax, VAT or National Insurance.
- Tax Policy Associates estimates that raising the bank corporation-tax surcharge from 3% to 5.5% could raise an additional £1bn to £2bn a year.
- Banks warn that higher taxes could discourage investment; research also suggests banks might pass some costs to customers through lower savings rates or higher borrowing costs.
- The Social Market Foundation estimates that doubling the tax on electronic gambling machines from 20% to 40% could raise £275m to £460m, depending on how gamblers respond.
- The article says gambling machines are clustered in some deprived UK high streets and cites research finding that one in four people who play casino games on them gamble at risky or harmful levels.
- The Treasury estimates it misses about £12bn a year in VAT that companies should pay; reports say large online marketplaces could be made responsible for collecting VAT from retailers selling through them.
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