Brexit has triggered 'explosion' of investment says Rishi Sunak
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Experts from the Local Government Association have predicted Council Tax is expected to rise in order to tackle national debt and strain on the social care system. Other political commentators say Inheritance Tax (IHT) reliefs are likely to be stripped back, decreasing the amount that loved ones receive, whilst another wealth tax could be introduced.
Government debt reached £2.21trillion in July 2021 after the Covid pandemic required emergency funding on a scale never seen before.
To tackle the financial hit the National Health Service has faced, a 1.25 percent tax rise was announced on September 7 by Prime Minister Boris Johnson which evoked a wave of criticism from both Labour opposition and members of his own party.
Now, other taxes are reportedly under review by the Government.
The Local Government Association has said Council Tax might have to rise by nine percent because of higher costs for looking after the elderly, disabled and long-term sick.
When revealing this year’s Spring budget, Mr Sunak announced IHT, which had been due to rise in line with the Consumer Price Index from the next tax year, would instead remain at its current rate until 2026.
But many have argued that a rise to IHT is overdue, after the Office of Tax Simplification recommended a lower flat rate of IHT and significantly reduced reliefs and exemptions in 2019.
IHT is currently applied to the portion of a person’s estate above the £325,000 tax free threshold at a flat rate of 40 percent upon their death, unless a significant proportion passes to charities in which case the rate applied reduces to 36 percent.
John Caudwell, founder of Phones 4U, whose net worth sits at £1.5billion, has called for a one-off ‘Windfall Tax’ on the ‘super rich’ who have largely seen their wealth increase during the pandemic.
A one-off tax of five percent on all wealth over £1billion would generate £19billion in tax revenue according to The Sunday Times.
The combined wealth of the country’s 250 wealthiest people had risen from £566billion to £658billion, and the top 20 percent of wealthy households hold 57 percent of all wealth in the UK.
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At the Conservative conference in Manchester, Jacob-Rees Mogg said that the government has hit “the limit” for taxation.
He said: “We are at the upper reaches of the reasonableness of the tax burden.”
Chancellor of the Exchequer Rishi Sunak told Sky News that he cannot guarantee a lock on taxes, and in his speech at the conference today he acknowledged that taxation is necessary and for the greater good.
Mr Sunak said: “I have to be blunt with you, our recovery comes with a cost.
“Our national debt is almost 100 percent of GDP, so we need to fix our public finances.
“Whilst I know that tax rises are unpopular, some will even say un-Conservative, I’ll tell you what is un-Conservative, un-funded pledges, reckless borrowing, and soaring debt.”
He also announced that £500million will be invested into extending job-hunting help schemes, after a huge portion of the population lost their jobs due to the pandemic.
One of the schemes, Kickstart, gave employers the opportunity to offer those aged 16-24 who are claiming Universal Credit a six-month work placement.
The government fully funded each “Kickstart” job – paying 100 percent of the National Minimum Wage, National Insurance and pension contributions for 25 hours a week.
The Treasury said the new jobs created by the scheme would “give young people – who are more likely to have been furloughed, with many working in sectors disproportionately hit by the pandemic – the opportunity to build their skills in the workplace and to gain experience to improve their chances of finding long-term work”.
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Avaani Johal, a 23-year-old law graduate who was made redundant at the start of the pandemic, managed to secure a job with the Kickstart scheme after facing months of unemployment.
She told Express.co.uk: “Job hunting during the pandemic was an extremely difficult task with competition at its highest yet.
“I spent over a year and a half applying for roles with very little success, but the Kickstart scheme has opened doors for me.
“I am very grateful that the scheme exists, as I never would have been able to get into this career field without it.”
The Government believes that investing in jobs will make the country more prosperous in the long run as less people will rely on the benefits system.
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