Home Finance TV Licence and Inheritance Tax should be ‘scrapped’ – Rishi Sunak urged...

TV Licence and Inheritance Tax should be ‘scrapped’ – Rishi Sunak urged to act in Budget

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TV licence payments must be met by more people going forward as free licences were removed for over 75s unless they are in receipt of Pension Credit. This was a move which created much controversy, leading to many calling for the fee to be scrapped. A similar stance is taken by some when it comes to Inheritance Tax, payable on the estate of someone who has passed away.

Seemingly bearing this in mind, a new report has made suggestions that the TV Licence and Inheritance Tax should be scrapped, alongside other levies currently in place across the United Kingdom.

The report, devised by the Institute for Economic Affairs (IEA) has called upon the Chancellor to take action, ahead of the Budget.

It urged Mr Sunak to “simplify the tax system, reduce the overall burden of taxation, and eliminate many harmful distortions.”

Written by Alexander Hammond, Policy Analyst and Sam Collins, Advisor to the Director General at the IEA, the report put forward 20 taxes to scrap or significantly change.

READ MORE: State pension claim numbers fall amid age changes – pension warning

The IEA also suggested it could potentially be restructured to become a “subscriber owned mutual organisation”.

Problems were also presented with Inheritance Tax, a levy commonly accepted as not well-liked by the British public.

The IEA stated there are “many” reasons why Inheritance Tax should be scrapped including the bureaucratic burdens families will have to shoulder after the death of a loved one.

In addition, the organisation said, the tax is “arguably immoral” given people are already taxed in their lifetime. 

It also raised issues with the current IHT threshold, which has been frozen at the same rate for more than a decade.

This, the IEA has said, means many more Britons are forced to pay the tax upon the death of an individual.

The report also posited Capital Gains Tax, alongside Stamp Duty, and the bank surcharge could be eliminated altogether.

Simplification of Council Tax, the IEA went on to state, could remove “disincentives” for property improvements and housebuilding. 

Alexander Hammond, policy analyst at the IEA and co-author of the report, commented on the matter.

He said: “A low and radically simplified tax system is the best way for our economy to recover from repeated lockdowns and prosper for decades to come.

“Given our newfound post-Brexit freedoms, now is the time for a brave Chancellor to embark on a radical tax-scrapping bonanza.

“The UK is in the unfortunate position of having many regressive taxes, and this paper suggests a number that could be among the first to go.”

It remains to be seen what actions the Chancellor will take tomorrow in his annual Budget.

While tax rises have been speculated, many hope Mr Sunak will address issues such as furlough, SEISS and Universal Credit to help Britons during the pandemic.

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