Latest news with #StampDuty
Spectator
5 days ago
- Business
- Spectator
Reform's ‘Britannia cards' will cost £34 billion
Speaking today at Church House in Westminster, Nigel Farage announced that Reform will introduce a 'Britannia card' that will let wealthy foreigners pay a £250,000 fee to move to the UK, and live here exempt from all tax on their foreign assets. The move is an attempt to win over 'non-doms' alienated by Labour and Conservative governments and bring their wealth back into the country. Farage may think his policy will attract 'talented people' from around the world, in reality it is more likely to deter them. Farage forgot about the Laffer curve The party says the policy will raise between £1.5 and £2.5 billion annually. Our analysis of the data suggests it is more likely to cost around £34 billion over five years. To understand why the policy will cost so much, it is important to look at the recent history of 'non-doms'. For many years, anyone moving here paid tax on their UK income and assets but were exempt from tax on foreign income and assets (unless they brought them into the country). There were then a number of reforms which introduced a £30,000 fee to keep this benefit – a fee which increased over time. Finally, in 2024 the Tories scrapped the non-dom regime and replaced it with a four-year exemption from tax on foreign earnings. Labour slightly tightened that exemption this year. Reform is proposing to go back to the pre-2017 position for the very wealthy, with a new fee structure. Non-doms will be able to pay a one-off £250,000 for a 'Britannia card' and become tax-exempt on foreign earnings and assets forever. There's then a cute bit of populist politics: the £250,000 payments will be redistributed Robin-Hood style as a cash payment to the approximately 2.5 million workers earning a full-time salary of less than £23,000. The party's 'low end' estimate is that 6,000 people will buy a 'Britannia card' each year – and on that basis the policy will generate £1.6 billion, meaning a £600 payment to each low-paid worker. Farage went further when he introduced the policy, saying 'tens of thousands' would be tempted to move to the UK and the payment would be 'just the tip of the iceberg of what these people will pay if they come back' because of the likes of VAT and Stamp Duty. There are several big problems with this. First, whilst the proposal makes the UK more attractive to the very wealthy who can afford £250,000, it makes the UK much less attractive to the highly skilled and highly paid professionals we want to attract from abroad – such as doctors, coders, senior scientists and entrepreneurs. Many other countries have special tax arrangements to attract these kinds of expats. Under Reform's proposal, the UK would be very uncompetitive by comparison. Those unable or unwilling to pay the £250,000 upfront cost would suddenly have to pay full UK tax, and also any tax in their home country. Often these expats will have savings in their home country which benefit from a favoured tax treatment – much like an ISA. The prospect of those savings suddenly being subject to UK tax will not be appetising for them. Farage may think his policy will attract 'talented people' from around the world, in reality it is more likely to deter them. Farage forgot about the Laffer curve. Second, Reform is planning to hand a windfall to a relatively small number of very wealthy people who were already planning to stay here and pay tax. They will now just have to pay a one-off £250,000, with the rest of their tax revenue disappearing. The amounts involved are very large. The Office for Budget Responsibility suggests recent Conservative and Labour non-dom reforms will raise £33.9 billion from 2026-30, with most of this revenue coming from the Conservative's 2024 reforms. When wealthy individuals stop paying tax after they buy a Britannia card, this money will be lost – and will have to be funded by tax cuts or spending rises, especially as any Britannia card revenue will be given directly to those on low incomes. The OBR figure takes 'behavioural response' into account, and the OBR's record of tax projections is solid (their 2023 projection was just 4 per cent out). Could this cost be overcome by attracting lots of very wealthy people to the UK? That seems pretty unlikely. When the £30,000 annual non-dom fee was first introduced in 2008, only 5,000 people were willing to pay it. The idea that more than 6,000 people will pay £250,000 upfront is very optimistic. The idea that 6,000 will pay every year is almost inconceivable. There's another problem here for Reform. Because the rules around non-doms have changed so much in recent years, few billionaires will truly believe they will be forever exempt from tax if they purchase a Britannia card. After all, no parliament can bind its successors. Unless you think Reform are going to win two or more elections in a row, you're unlikely to move here to benefit from the tax regime. That's particular the case after other countries have rescinded their previously generous tax offers for expats. Spain lured highly paid foreigners with its 'Beckham's law', but in the 2020s began to aggressively target people who'd used it. Portugal recently restricted its generous non-habitual residence regime. High-net-worth individuals crave stability and predictability when making long-term decisions about where they are going to live. It's unlikely many will be attracted by a 'Britannia card' that could be cancelled in a few years anyway.
ITV News
12-06-2025
- Business
- ITV News
UK economy shrinks by more than expected in April in blow to Rachel Reeves
The UK economy contracted by 0.3% in April, according to the Office for National Statistics (ONS), in a blow for Chancellor Rachel Reeves just a day after she unveiled her spending review. Figures from the ONS showed the economy went into reverse after growing by 0.2% in March and 0.5% in February. It was also worse than the 0.1% contraction expected by most economists. ONS Director of Economic Statistics Liz McKeown said April saw the largest monthly fall on record in goods exports to the United States, with decreases across most types of goods, following the recent introduction of Donald Trump's trade tariffs. Reeves acknowledged that the latest GDP figures were 'clearly disappointing' but insisted her spending review would help deliver growth. The chancellor said: 'Our number one mission is delivering growth to put more money in people's pockets through our Plan for Change, and while these numbers are clearly disappointing, I'm determined to deliver on that mission. 'In yesterday's spending review we set out how we'll deliver jobs and growth – whether that's improving city region transport, a record investment in affordable homes or funding Sizewell C nuclear power station. We're investing in Britain's renewal to make working people better off'. ONS Director of Economic Statistics Liz McKeown said that services and manufacturing both fell, but over the last three months, as a whole, GDP still grew, "with signs that some activity may have been brought forward from April to earlier in the year". 'Both legal and real estate firms fared badly in April, following a sharp increase in house sales in March when buyers rushed to complete purchases ahead of changes to Stamp Duty. Car manufacturing also performed poorly after growing in the first quarter of the year," she said. 'In contrast April was a strong month for construction, research and development and retail, with increases in these only partially offsetting falls elsewhere." The Conservative shadow chancellor said the fall in GDP in April was the result of 'Rachel Reeves' economic vandalism'. Sir Mel Stride said: 'Before the election Labour promised 'growth, growth, growth' but today's fall in GDP lays bare the disappointing consequences of Rachel Reeves' economic vandalism. 'Yesterday, the Chancellor should have taken corrective action to fix the problems she has caused. But instead her spending review has all but confirmed what many feared: more taxes are coming. 'Under Labour, we have seen taxes hiked, inflation almost double, unemployment rise, and growth fall. With more taxes coming, things will only get worse and hard-working people will pay the price.'
Business News Wales
12-06-2025
- Business
- Business News Wales
Increased Choice for Welsh Homebuyers as Supply Increases and Fewer New Buyers Active
The number of house sales in Wales fell at the fastest rate seen since early 2023 according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey, and surveyors are cautious about the outlook. A net balance of -43% of respondents in Wales report that the number of house sales fell through the month of May. This is the lowest this balance has been since February 2023. Looking ahead, a net balance of -20% of respondents expects sales to continue to fall over the next three months. House prices are anticipated to be broadly flat in the same timeframe having risen marginally over the past three months. (A net balance of 7% of Welsh surveyors reported that house prices rose between March and May.) Regarding demand, a net balance of -7% of surveyors in Wales reported a fall in new buyer enquiries, which is a key factor in the cautious outlook. And with supply levels having seen an upturn – with a net balance of 49% of Welsh respondents noting a rise in new instructions to sell – those who are looking to purchase residential property appear to have increased choice. With regard to the lettings market, respondents in Wales report that both tenant demand and landlord instructions fell broadly flat in the most recent survey. As such, surveyors in Wales anticipate that rents will fall broadly flat over the next three months. Commenting on the sales market, William Graham, Chartered Surveyor of Graham & Co in Newport said: 'Despite little change in mortgage rates, valuation instructions have increased, and there is still a shortage of good quality well maintained houses in all prices.' On the lettings market, Anthony Filice, FRICS of Kelvin Francis Ltd in Cardiff added: 'Some, mainly older, landlords are selling up, whilst others, slightly younger, are buying some of these, adding to their portfolios. Rents have stabilised, with some landlords considering lower offers of rent.' Commenting on the UK picture, RICS Senior Economist, Tarrant Parsons, said: 'Sentiment across the UK residential property market remains somewhat subdued, with ongoing uncertainty around global trade policies and the dampening effect of transactions being brought forward ahead of the Stamp Duty changes at the end of March continuing to weigh on buyer activity. 'However, near-term sales expectations are showing signs of stabilisation, suggesting that while muted conditions may persist in the short term, a further deterioration appears unlikely. Looking ahead, the outlook is more optimistic, with respondents anticipating a gradual recovery in sales activity over the next 12 months. 'That said, the pace and extent of any improvement will partly depend on the Bank of England's ability to continue cutting interest rates.'
New Straits Times
12-06-2025
- Business
- New Straits Times
UK surveyors report weakest house price growth in nearly a year
LONDON: Britain's housing market lost more steam last month as demand faded from buyers after an increase in property transaction taxes in April and concerns mounted about global trade tensions, a survey showed on Thursday. The Royal Institution of Chartered Surveyors' monthly house price balance - which measures the difference between the percentages of surveyors seeing rises and falls in prices over the past three months - dropped to -8 in May from -3 in April, its weakest since July 2024. Economists polled by Reuters had forecast a smaller fall to -4. "Sentiment across the UK residential property market remains somewhat subdued, with ongoing uncertainty around global trade policies and the dampening effect of transactions being brought forward ahead of the Stamp Duty changes at the end of March continuing to weigh on buyer activity," Tarrant Parsons, senior economist at RICS, said. Thursday's survey chimed with other measures of Britain's property sector that have pointed to a slowdown, and Bank of England data which showed mortgage approvals dropped to their lowest in more than a year in April. While property surveyors expect to see a gradual recovery in sales activity over the coming year, Tarrant said the "pace and extend of any improvement" in part depended on whether the Bank of England continues to cut interest rates. The BoE is expected to hold interest rates unchanged next week. Financial markets were on Wednesday almost fully pricing two quarter-point interest rate cuts by the end of 2025. A Reuters poll of economists published this week also pointed to two such rate cuts. RICS' gauge of agreed home sales dropped further into negative territory. Its measure of new buyer enquiries fell to a net balance of -26 in May, slightly less downbeat than the -32 in April and March.
Business Times
12-06-2025
- Business
- Business Times
UK surveyors report weakest house price growth in nearly a year: RICS survey
[LONDON] Britain's housing market lost more steam last month as demand faded from buyers after an increase in property transaction taxes in April and concerns mounted about global trade tensions, a survey showed on Thursday. The Royal Institution of Chartered Surveyors' monthly house price balance - which measures the difference between the percentages of surveyors seeing rises and falls in prices over the past three months - dropped to -8 in May from -3 in April, its weakest since July 2024. Economists polled by Reuters had forecast a smaller fall to -4. 'Sentiment across the UK residential property market remains somewhat subdued, with ongoing uncertainty around global trade policies and the dampening effect of transactions being brought forward ahead of the Stamp Duty changes at the end of March continuing to weigh on buyer activity,' Tarrant Parsons, senior economist at RICS, said. Thursday's survey chimed with other measures of Britain's property sector that have pointed to a slowdown, and Bank of England data which showed mortgage approvals dropped to their lowest in more than a year in April. While property surveyors expect to see a gradual recovery in sales activity over the coming year, Tarrant said the 'pace and extend of any improvement' in part depended on whether the Bank of England continues to cut interest rates. The BoE is expected to hold interest rates unchanged next week. Financial markets were on Wednesday almost fully pricing two quarter-point interest rate cuts by the end of 2025. A Reuters poll of economists published this week also pointed to two such rate cuts. RICS' gauge of agreed home sales dropped further into negative territory. Its measure of new buyer enquiries fell to a net balance of -26 in May, slightly less downbeat than the -32 in April and March. REUTERS
