Members of the UK200Group of independent accountancy and lawyer firms have today commented on fears that Labour’s ‘Mansion Tax’ will one day affect a wider proportion of the population.

It comes after Alex Wild, research director at the Taxpayers Alliance, suggested that Labour’s ‘Mansion Tax’ could eventually affect more people than originally intended, should changes be made to it in the future.

He said that while the tax may initially target ‘the rich’ he fears that it will eventually be extended to the rest of the population and increased; a trend which he says is based on a number of historical examples, including stamp duty and income tax.

David Whiscombe, director of tax at UK200Group member firm BKL

Stop calling it Mansion Tax. Call it what it is: a selective wealth tax. And the concern is not so much extension to other taxpayers as the extension to other forms of wealth.   

Historically the UK has eschewed imposing a wealth tax, for very good reasons.  My concern is ‘mission creep’ from selective wealth tax to general wealth tax without the full and proper debate that it warrants.   

If Ed Balls taxes ownership of a £2m house this year, how long before he casts envious eyes on a £2m share portfolio or buy-to-let properties? Or pension fund?

David Ingall, past president, UK200Group

This is pre-election counter sabre rattling, which frankly misses the real point. Though the imposition of a ‘Mansion Tax’ is in reality a form of wealth tax, every one simply assumes that the government is justified in raising further revenues.

Big Government needs to find ever more ways of extracting funds from those perceived as being able to pay.

This selective way of bashing the wealthy, cynically popularised by certain political parties for their own devices, may well in future change into something more general.

But the Government needs to reduce its needs by slashing its expenditure and then this tax would not be needed.

Jonathan Russell, partner at UK200Group member firm ReesRussell

There are taxes which have been and gone, such as Window Tax, but the introduction of a ‘Mansion Tax’ is a blunt form of wealth tax, which takes no account of an individual’s total circumstances.

To a certain extent we already have a Mansion Tax called rates which is a tax upon the property a person lives in rather than owns, which through Government inactivity has gone nowhere.

But rates are a good example of how once a government has an idea of raising money it can use them as a cash cow and extend it to all.

Essentially the Government needs to balance its books and whilst those on the left of the political argument would wish to increase state provision and support, which needs more money to be raised by way or taxes (or borrowings!), those on the right are more inclined towards reducing expenditure to live within means; though as we currently spend more than we pay, tax rises cannot be ruled out!

Perhaps the political parties would be better off spending their time considering cheaper and more efficient ways of providing state funded services, rather than new and more complex ways of wringing money out of a population that is already struggling.

How about scrapping index linked final salary pension schemes for civil servants? And force them to live in the real world of money purchase schemes.

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Established in 1986, UK200Group is the leading mutual professional association in the UK with some 150 offices of quality-assured member accountancy and lawyer firms throughout the UK totalling over 550 partners, 150,000 business clients and global links in over 50 countries. UK200Group provide services and products that are designed to enhance the business performance of its members.  Telephone 01252 401050, email admin@uk200group.co.uk or visit www.uk200group.co.uk 

Disclaimer:

UK200Group is an association of separate and independently owned and managed accountancy firms and lawyer firms. UK200Group does not provide client services and it does not accept responsibility or liability for the acts or omissions of its members.  Likewise, the members of UK200Group are separate and independent legal entities, and as such each has no responsibility or liability for the acts or omissions of other members.

 

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