Report prefers ‘wealth tax’ over tax hikes for masses

The one-off tax proposed by the Wealth Tax Commission would affect people with assets worth £500,000 or more

The introduction of a one-off 'wealth tax' on the most prosperous households in the country is preferable to hiking taxes for the masses, a new in-depth report has claimed as economic turmoil mounts in the UK.

The national debt has spiralled this year as the Government spent more than £280billion tackling the virus and its financial fallout, with Chancellor Rishi Sunak claiming the 'economic emergency' has only just begun. Although growth figures indicated a stronger performance by the economy in October than had been expected.

When it comes to clawing back the big splurge, a report from the Wealth Tax Commission suggests that the Government should target only the wealthiest, rather than increase income tax or VAT, which would negatively affect millions of people.

The one-off tax it proposes would affect around 10million people with £500,000 or more worth of assets. The Commission said the one-off wealth tax would be equivalent to raising VAT by 6p or the basic rate of income tax by 9p for the same period.

The tax would be levied all assets such as main homes and pension pots, as well as business and financial wealth, but deduct any debts like mortgages.  It would be paid by any UK resident, including those classified as 'non doms', who are UK residents but live abroad, often for tax reasons.

Dr Arun Advani, assistant professor at the University of Warwick, who is one of three commissioners behind the report, said: We’re often told that the only way to raise serious tax revenue is from income tax, national insurance contributions, or VAT. This simply isn’t the case, so it is a political choice where to get the money from, if and when there are tax rises.