Latest news with #taxraid
Telegraph
15-06-2025
- Business
- Telegraph
Reeves plots Budget tax raid on dividends
Rachel Reeves is drawing up plans for a tax raid on dividends in her autumn Budget in a hunt to find tens of billions in revenue. The Chancellor of the Exchequer's officials are understood to have drawn up a menu of tax increases, including a raid on dividends suggested by Angela Rayner in a leaked memo. Officials are considering abolishing the £500 tax-free allowance for dividend payments, or increasing the rate of tax from its current level of 39 per cent. Removing the allowance could raise the Treasury more than £300 million and may allow the Chancellor to claim she has not increased taxes on 'working people', a Labour pledge before last year's general election. But the Conservatives said the rise would amount to Ms Reeves 'putting her hands in the pockets of British taxpayers and businesses'. The so-called 'dossier' of tax changes, first reported by The Sunday Times, was not denied by senior government officials last night. It included an increase on the levy on bank profits, which is charged on top of the normal corporation tax rate of 25 per cent.
Daily Mail
11-06-2025
- Business
- Daily Mail
Business counts cost of Labour's bloated state amid fears Chancellor is set to launch another tax raid
Business has been left fearing another tax raid after the Chancellor's spending review failed to shrink the bloated state. Bosses demanded that Rachel Reeves show leadership by tackling public sector waste – as the private sector is having to cut its cloth as Government-imposed costs surge. Reeves told MPs she would be 'relentless in driving out efficiencies', claiming billions would be saved through greater productivity and more use of artificial intelligence (AI). But her announcement did nothing to change the size of the spending 'envelope' set out at the time of her Spring Statement, leaving many fearing the worst in this autumn's Budget. Analysis of official forecasts cited by former Bank of England rate-setter Andrew Sentance shows spending as a proportion of GDP will average 44.6 per cent during Labour's parliamentary term. 'However Rachel Reeves spins her spending review, this Government is planning the biggest spending review since World War Two, outdoing even Denis Healey [in the 1970s] in spending as a share of GDP,' Sentance said. That profligacy has come at a cost: higher taxes. Businesses have so far borne the brunt, as the Chancellor's £25billion raid on employer National Insurance Contributions (NICs) in last autumn's Budget left them scrambling to find savings – and, in many cases, cut jobs – as they also grappled with a sharp rise in the minimum wage. The spending review will not improve that situation. In fact, it has only heightened fears that Reeves will put taxes up again. That is because a worsening economic picture – partly thanks to Donald Trump's trade war – could take its toll on growth and, therefore, reduce the tax take. Higher borrowing costs are also making it harder for the Chancellor's sums to add up. Reeves insisted that the fiscal rules obliging her to balance the books are 'non-negotiable' – meaning something will have to give. The Institute of Directors (IoD) voiced hopes that some of the Chancellor's efficiency measures could be used to help business. Anna Leach, chief economist at the IoD, said: 'We would expect over time for savings to be used to bring down the tax burden from its post-war record.' But the Chancellor made clear that she had no intention of doing so. Instead, she boasted that 'every single penny [will be] reinvested back in our public services' – raising eyebrows in the City given the state of the public finances and long-term projections that they will get even worse over coming decades. 'Makes sense when your debt is on a sustainable path, less so when debt [as a proportion of GDP] is heading to 270 per cent and interest costs £105billion/year,' said Simon French, chief economist at broker Panmure Liberum. It all added up, experts said, to an inevitable tax raid this autumn. The frustration for bosses is that while the Chancellor recycles cash around the public sector – part of her plan includes hiring thousands more staff to collect tax – they are having to make tough choices after being battered by her tax raids. Steve Hare, chief executive of UK software firm Sage, noted in an interview with the BBC that while his clients – small and medium businesses – were 'trying to drive their own productivity and efficiency', the size of the Civil Service workforce had swollen to more than half a million. For some firms, efficiencies may not be enough. Michael Turner, chairman of pubs group Fullers, warned: 'The changes to NICs took everyone by surprise and I fear it could be terminal for a number of smaller operators in our market.' The Confederation of British Industry (CBI), Britain's main business lobby group, has warned that the prospect of further tax increases risked further damaging sentiment. 'Businesses are labouring under the cumulative burden of rises in NICs and minimum wages,' said CBI chief executive Rain Newton-Smith. She added: 'With the Autumn Budget now coming sharply into focus, the Chancellor should prioritise squashing tax rumours and speculation that risks stymying confidence and subduing investment decisions.' But others were broadly resigned that more punishment is on the horizon. 'Tax rises are now all but inevitable... no matter what measures are taken between now and the Budget,' said Alison Ring, the director at the Institute of Chartered Accountants in England and Wales. She added: 'The Government's sticking plaster strategy remains an obstacle to addressing the deep-set challenges facing the country.'
Telegraph
07-06-2025
- Business
- Telegraph
Starmer's raid on family businesses to cost his constituents 1,000 jobs
Labour's tax raid on family businesses is projected to cost hundreds of jobs in Sir Keir Starmer's constituency alone, new analysis shows. The revenue-raising scheme is also projected to hit the local economies of Labour constituencies harder than their Conservative, Reform and Liberal Democrat-voting counterparts. Analysis by the Confederation of British Industry (CBI), which represents nearly 200,000 UK businesses, revealed that the changes to business property relief (BPR) announced in Rachel Reeves's October Budget will stifle growth in Labour seats across the country. The CBI claims that the average gross value added (GVA) losses in seats that elected Labour MPs at the last general election will be over £24 million, compared to £20 million in Conservative seats and £18.5 million in Reform constituencies. The projections span from the October 2024 budget to April 2030, after the next general election. Only seats held by the Green Party fared worse with an average GVA loss of around £40 million, suggesting that cities and urban centres will be worst hit by the raid. The CBI expects the economic hit to result in thousands of job losses in the most-exposed constituencies. Sir Keir's seat of Holborn and St Pancras will be the fourth-worst hit constituency in the country with 1,037 jobs expected to be lost, according to the analysis. Cabinet ministers to feel the pinch in their seats Red Wall seats are also set to suffer. The analysis shows that of £14.9 billion in nationwide GVA losses, some £4.6 billion (31 per cent) of that will hit constituencies that the Tories won in 2019 and Labour won back in 2024. These seats include the 31 Red Wall seats in the North and Midlands along with other key marginal constituencies which Labour will hope to win again at the next election if it wants to stay in power. Senior Cabinet ministers will also feel the pinch in their constituencies. The second-worst hit seat in the country, Manchester Central, is currently represented by Lucy Powell, the Leader of the House of Commons. The third-worst hit seat is Birmingham Ladywood, represented by Shabana Mahmood, the Justice Secretary. Hilary Benn, the Northern Ireland Secretary, represents the ninth-worst-hit seat of Leeds South. In the October Budget, the Chancellor slashed BPR in an attempt to raise money from family businesses. BPR was originally introduced by a Labour government in the 1970s. It allows company shareholders to leave business assets to loved ones without paying inheritance tax on them. But in a sweeping change that will take effect in April 2026, full business relief will only apply to the first £1 million of a business's assets upon a shareholder's death, with everything above this subject to 20 per cent tax.
Daily Mail
04-06-2025
- Business
- Daily Mail
Labour's war on farmers isn't just causing suicide and despair... it's threatening Britain's national security at a time of grave peril: JAMIE BLACKETT
The day before Chancellor Rachel Reeves delivered her Budget last October, 78-year-old South Yorkshire farmer John Charlesworth killed himself. He knew that the Government was going to mount a punitive tax raid on family-owned farms and wanted to make sure that his son and daughter would have the means to keep the farm and look after his dementia-stricken wife.
Daily Mail
01-06-2025
- Business
- Daily Mail
Tesco to close its Express stores an hour earlier after being hit by £235million in Rachel Reeves' tax raid
Tesco is set to close its Express stores an hour earlier after the supermarket giant was hit by a £235million rise in staff costs by Rachel Reeves ' tax raid. The chain is trialling shorter opening hours at the Express stores, it is understood, closing some at 10pm rather than the usual 11pm. Meanwhile, Tesco is also anticipated to have less staff running those stores during their opening hours, The Telegraph first reported. The changes were created to 'make things simpler for our colleagues and to ensure that we are running these shops in the most efficient way', a spokesman said - adding that the trial will take place in a number of stores. It comes after Tesco's chief executive Ken Murphy revealed the supermarket giant was doing its best to offset a burst of extra costs following Reeves' tax raid, which took effect from April this year. After the raid was announced, Tesco said it was facing a serious rise in its staffing bill, including a £235million increase in National Insurance contributions. Under the changes, employers fork out a tax equivalent to 15 per cent of their workers' pay packets, an increase from 13.8 per cent previously. Tesco is dealing with affected staff and considering individual circumstances and whether they need to transfer to another store, it is understood. A spokesman for the chain said: 'These changes aren't visible to our customers, who will continue to receive the same great service they expect, and there are no changes to the range of products we sell.' In April, Tesco warned its profits would drop by as much as 14per cent this year as it gets ready to invest £400million in price cuts.
