Economics professor and Institute for Fiscal Studies fellow Arun Advani writes in the Guardian calling on the Chancellor to prioritise capital gains tax reform. Nothing radical is required, says Advani – just equalise capital gains with income tax. Most capital gains come from the sale of small businesses with the cash deemed compensation for working. But the tax rates for these gains are far lower than the income tax paid by ordinary workers. Aligning the two would make the system fairer, asserts Advani, and the economy more efficient, whilst also raising substantial revenue.
Analysis by Mr Advani also features elsewhere in the Guardian where Pamela Duncan reports on the so-called “super-gainers” – the wealthiest individuals in the UK - who if taxed on gains in line with salaries, would net the Treasury an extra £16bn a year. Meanwhile, according to data compiled by Haysmacintyre, HMRC receipts from CGT have risen by 62% in the last five years, from £7.1bn in 2015/16 to £11.5bn in the last twelve months.
Katharine Arthur, a partner and head of private client at Haysmacintyre, said that “with receipts from CGT having already doubled in the last six years, reaching a record high in the process, the Government should be asking itself if now really is the time for any rise in CGT rates. Particularly during the cost of living crisis that families up and down the country are currently facing.”
Read more: City AM
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