Brits Fear Income Tax Raid More Than VAT Rise or Stricter Inheritance Rules

As speculation mounts over the upcoming Budget, a recent survey has found that Brits are more fearful of an income tax raid than a rise in VAT or stricter rules on inheritance. The survey, commissioned by the investment platform Hargreves Lansdown, reveals that higher rate taxpayers are particularly anxious about Rachel Reeves' Budget plans, with a rise in income tax rates topping the list of pre-Budget fears. The poll also found that higher earners are concerned about the removal of tax breaks on pension contributions, ranking second on the list of tax fears.

Key Takeaways:

• A rise in income tax rates is the top concern for Brits ahead of the Budget, with 34% of respondents citing it as their main worry.
• Higher rate taxpayers are more anxious about income tax rises, with 42% of this group citing it as their main fear.
• The removal of tax breaks on pension contributions is the second biggest worry for higher earners, with 30% of this group citing it as their main concern.
• Across the UK population, a rise in VAT and council taxes are the second and third biggest worries, respectively.
• Statistically, the tax you're most likely to be worried about rising in the Budget is income tax, and thanks to frozen thresholds, this is "nailed on".
• The second biggest worry is VAT, and thanks to inflation, there's every chance you'll automatically be handing over more money to the taxman in VAT too.

Statistics:

• 34% of respondents cited a rise in income tax rates as their main worry ahead of the Budget.
• 42% of higher rate taxpayers cited a rise in income tax rates as their main worry.
• 30% of higher earners cited the removal of tax breaks on pension contributions as their main concern.
• Effective tax rates on the self-employed are around half that paid by employees.
• The tax gap between employees and the self-employed has increased since last year's Budget £20bn raid on employers.

Sources:

• "Rachel Reeves told to cut National Insurance and raise income tax to gain £6bn", City AM
• "Hiking VAT would have 'serious negative impact' on economists warn Reeves", City AM
• "Business leaders ramp up pre-Budget lobby efforts amid tax fears", City AM
• "Pre-Budget briefing: The inequality crisis in the self-employment tax regime", Resolution Foundation