Comparisons of the COVID-19 pandemic to war have come thick and fast.
Perhaps it is inevitable that public spend and taxation should face the same comparison.
This piece points to predictions of record state spending this year of more than £1 trillion, reduced tax receipts (£2.2 billion less this March than last) and to Chancellor Rishi Sunak’s acknowledgement that there will need to be decisions on “righting the ship”.
After the Second World War, steps were taken to apportion the refilling of state coffers to shift the burden away from the lower paid. These included introducing the PAYE system with bands as high as 97.5% for the highest earners and taxing estates on death at 80%: twice today’s 40% inheritance tax rate.
Whether we will face the same again can only be speculation for the time being, but for tax planning purposes, it is food for thought and a space worth watching.
rumours of previous plans for reforms to inheritance tax, which never made it into the Chancellor’s emergency Covid-19 budget, could be revived to raise much needed cash, alongside manifesto pledge-breaking increases to income tax, VAT and National Insurance, experts have said.