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Press comment: MPs support tax rise to fund public services

19/05/2020

If you are covering the survey from The House, which shows that 72% of MPs believe that taxes should rise to fund public services, please see the following comment from Rachael Griffin, tax and financial planning expert at Quilter:

“The government has provided unprecedented financial support to tackle the economic effects of Covid-19 and as we move out of the initial lockdown, speculation continues to build on how the government will eventually settle the bill. With further austerity ruled out by the Prime Minister, the Chancellor is under increasing pressure to find a solution that is both politically acceptable, and economically practical.

“The survey shows that there is a clear acceptance among MPs that taxes will have to rise in future to pay for the financial measures and to support our public services.”

How might the government increase tax?

“The Treasury may increase income tax rates. Taxes on income make up the largest proportion of the government’s coffers so even a fairly marginal change would have a big impact on the impending deficit. However, any tax that reduces disposable income during a downturn will be hard to stomach, and so it is likely that income tax rates will remain unchanged in the short- to medium-term but will then increase in the long term, as the government sends a signal to the markets that they are committed to reducing the deficit.

“There is also growing speculation that a one-off or ongoing levy on personal wealth could be implemented in the UK to rebalance the wealth distribution and provide a significant boost to government revenue. However, there are a number of practical and political difficulties associated with a levy on wealth, so it is likely that any change to the taxation of wealth will take the form of changes to Capital Gains Tax and Inheritance tax. 

“In this period of economic uncertainty, one thing is clear: anything and everything will be on the table and we will see a flurry of fiscal changes from the government in the months and years ahead that will radically alter the tax landscape. Access to quality financial advice is going to prove vital in managing these changes.”

 

For more information contact

James Ventress020 7002 402507884 753012james.ventress@quilter.com

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £95.3 billion in customer investments (as at 31 March 2020).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform and Quilter International, including AAM Advisory in Singapore.

The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.

Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Quilter Financial Advisers (previously Charles Derby Group)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Investment Platform in 2020)
  • Quilter International (previously Old Mutual International)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.