Three of Labour’s key tax proposals are reported to be under review by the Treasury amid concerns they’ll cost more money than they’ll generate.
The plan to impose value-added tax (VAT) on private school fees, set to start in January, could face delays due to concerns about administrative challenges, Bloomberg reports.
Chancellor Rachel Reeves is also said to be reassessing its tax reforms for non-domiciled individuals, following warnings that the changes could lead to a “wealth exodus” and ultimately reduce revenue.
A “non-dom” refers to a UK resident whose permanent home, or tax domicile, is considered to be outside the UK.
Additionally, proposals to raise the tax on carried interest for private equity fund managers, from 28 percent to 45 percent, are under scrutiny.
There are fears that such a hike could drive top financiers out of the UK, reducing the overall tax take.
Together, these tax measures were initially expected to bring in £4.8billion, which were set to fund things like 6,500 new teachers, 40,000 more NHS operations, scans and appointments per week, and 8,500 new mental health staff.
Bloomberg’s political editor Alex Wickham wrote on X: “Rachel Reeves’ budget and Labour’s manifesto pledges have been plunged into uncertainty after the Treasury reviewed three key revenue-raisers.”
He concluded: “Reviews mean that just three weeks from the budget it is now unclear how Labour will fund their manifesto commitments.”
Ms Reeves will announce the new Labour Government’s Autumn Budget on October, Wednesday 30, outlining the spending and revenue plans for the upcoming fiscal years.
Britons have been warned the Budget will involve “difficult decisions” on tax, spending and welfare as the Government looks to plug a “£22billion hole” in the nation’s finances.
Express.co.uk has contacted the Treasury for comment.
