John Healey rules out capital gains tax hike in Budget
John Healey has squashed speculation he will raise capital gains tax in the forthcoming Budget after rejecting calls from his Cabinet colleagues. The Treasury was facing lobbying efforts from top ministers, including Louise Haigh and Wes Streeting, to raise the capital gains tax (CGT) rate from its current level of 24 per cent for higher [...]
John Healey has dismissed suggestions of raising capital gains tax in the upcoming Budget, despite lobbying from fellow Cabinet members. The Treasury had been approached by high-ranking ministers, such as Louise Haigh and Wes Streeting, to raise the CGT rate for higher earners from the current 24 per cent. However, Healey has opted to reject these calls due to concerns that such a move would encourage high-earners to leave the UK.
The government has faced criticism from former Prime Minister Andy Burnham and Lord Jim O’Neill for potentially sending a negative message about business climate, with Burnham emphasizing the party's responsibility for previous tax increases totaling £70 billion. CGT is levied at 18 per cent for basic rate taxpayers and 24 per cent for higher rate taxpayers.
Healey's options for raising revenue appear limited, as the government has ruled out equalizing CGT bands with income tax and has committed to not raising VAT, national insurance, or income tax, as per the Labour manifesto. A potential revenue booster is a proposed increase in the banking surcharge, currently standing at 3 per cent, which could generate around £2 billion annually.
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