IPPR welcomes capital gains tax alignment recommendations from government tax advisers
Think tank previously calculated that aligning CGT with income tax could generate £90 billion for the Treasury over five years
A report commissioned by the Chancellor from the Office of Tax Simplification has today called for the annual allowance on capital gains tax in the UK to be slashed and CGT rates brought closer to those of income tax.
IPPR’s landmark Commission on Economic Justice proposed such changes in its 2018 report and the think tank has since published further reports and polling on the subject.
Nearly two thirds of those polled in November last year supported a boost to taxes on capital gains from wealth, with just 11 per cent of voters supporting the status quo.
In a September 2019 report, IPPR calculated that equalising CGT and income tax rates, and scrapping most CGT allowances and reliefs, would generate £90 billion in additional revenue for the Treasury over five years.
Carys Roberts, IPPR Executive Director, said:
“As recognised by this report, our current tax system distorts behaviour, facilitates tax avoidance and holds back both economic growth and equity. The proposal to more closely align rates of tax on income from work and capital gains would be fairer, simpler and raise revenue for the Exchequer.
“Two years ago, the IPPR Commission on Economic Justice called for a simple principle – that income from wealth should be taxed the same as income from work. Aligning capital gains tax with income tax would be an important step towards this, and even more vital as the Chancellor looks for ways to raise revenue and build a fairer economy after the pandemic.”
David Wastell, Head of News and Communications: 07921 403651[email protected]
Robin Harvey, Digital and Media Officer: 07779 204798 [email protected]
NOTES TO EDITORS
- The IPPR paper, Just Tax: Reforming the taxation of wealth and work by Henry Parkes and Shreya Nanda made the case for the alignment of capital gains tax and income tax and is available for download here https://www.ippr.org/research/publications/just-tax
- IPPR/YouGov polling from this time last year found just 11 per cent of people support the status quo where income from work is taxed more highly than capital gains or share dividends. Nearly two-thirds support a boost to taxes on capital gains from wealth — with 34 per cent supporting equalising capital gains taxes with income taxes, and 28 per cent supporting higher rates for capital gains than for income tax. The polling report is available here: https://www.ippr.org/research/publications/paradigm-shift-in-economic-policy
- Video: IPPR animation explaining the case for capital gains tax reform is available to view and embed. Digital copies can be sent on request. Available to view here: https://www.ippr.org/media-item/taxing-wealth-and-work
- IPPR is the UK’s pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester, Newcastle and Edinburgh, IPPR is Britain’s only national think tank with a truly national presence. www.ippr.org