Campaigners urge broader look at tax-raising options

12 Oct 18

The government should look beyond income tax, National Insurance and VAT to find funding for the NHS, a tax campaign group has argued.

Tax Justice UK proposed a raft of tax increases that would help raise the £20bn a year for the health service, which the prime minister promised earlier this year.

The group said tax rises would have to form part of the solution to the NHS’s needs but the government should look at taxation outside the three main revenue sources of income tax, National Insurance and VAT.

It recommended raising corporation tax, abolishing entrepreneurs’ relief, reforming council tax, requiring older workers to pay National Insurance contributions, curbing pension subsidies for the wealthy and taxing income from wealth at the same level as income from work.

These measures, Tax Justice UK said, would raise more than £23bn annually.

Chief executive Robert Palmer said: “A clear majority of the UK public support increasing tax to help fund the NHS.

“This is a golden opportunity for the government to reform the tax system so that wealth tied up in property and other assets is taxed fairly.”

The group said the amounts raised annually by each measure were as follows:

 

  • Raising corporation tax from 19% to 20% = £8.4bn
  • Abolishing entrepreneurs’ relief = £2.7bn
  • Taxing income from wealth at the same level as income from work = £4bn
  • Reforming council tax to more accurately reflect real property values = £5bn
  • Applying NICs to earnings of those older than the state pension age = £1.3bn
  • Curbing pension subsidy to the wealthy = £2bn.

 

Palmer said: “Our proposal is just one way in which the government could raise taxes to fund the NHS and promote a more equal and fairer society.

“Any reforms along these lines would need to be accompanied by greater efforts to clamp down on tax avoidance and evasion.

“Ultimately, this should be seen as a real opportunity to have a broader debate about the level of public services we want and how to pay for them.”

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