HMRC Receipts Drop | Capital Gains Tax Changes Cause Outrage
Changes to capital gains tax (CGT) are stirring up discontent as HMRC receipts are falling steeply. While the government aimed to boost revenue, many people are expressing exasperation over how these adjustments are impacting their finances.
The Growing Outcry
Commenters on various forums are putting the spotlight on the negative effects of recent tax changes. The criticism centers on the current capital gains threshold, viewed as excessively low. One individual stated, "The current capital gains threshold was decimated under the tories," accusing the government of managing this ill-fated transition poorly.
In the fiscal year 2023-24, CGT receipts experienced a drop to £14.5 billion, with projections of declining further to £13.1 billion in 2024-25. In contrast, receipts were nearly £17 billion in 2022-23. The first half of 2024 recorded £11.8 billion, down from £13.5 billion over the same period last year.
Interestingly, a prominent forum comment read, "There's a good chance they'll go up again in October given that they plan on increasing a whole host of taxes." This speaks to concerns that forthcoming tax policies could put even more pressure on taxpayers.
Themes Emerging from Comments
Discontent with Policies: Many commenters believe that increased rates aren't translating into higher revenues, with past Tory policies receiving the brunt of the blame.
Investor Hesitation: A noticeable shift in taxpayer behavior is evident, with individuals opting to hold onto their assets. One user declared, "You don't need to sell stocks and crypto; you can just hold till a new government comes in."
Escape Routes: Many express frustration with current policies, with comments suggesting alternatives like leaving the country or securing loans instead of paying taxes. One person asserted, "I will just get a fiat loan if needed.”
Key Quotes from Users
"Nobody is selling, so no."
"There's absolutely no way I'm selling to help fund the parasites."
"Lmao I’d never pay a penny of CGT to this corrupt scum government."
Key Insights
🔽 CGT receipts decline from £17 billion in 2022-23 to £13.1 billion in 2024-25.
🌐 "There's a good chance they'll go up again in October," reflecting ongoing concerns about tax adjustments.
🎯 Many believe the burden on taxpayers will worsen if changes are not made soon.
What's Next for Capital Gains Tax?
Tax policies affecting capital gains are under increasing scrutiny as public dissatisfaction grows. With many confronting the stress of complicated tax obligations, could a reassessment be on the horizon? Experts suggest there’s an approximately 70% chance the government will consider raising the CGT threshold or modifying rates soon.
The government's next moves may either stabilize or further erode tax revenue. If discontent continues, it could lead to political ramifications in future elections.
A Cautionary Tale from the Past
Reflecting on the early 1990s, steep increases in capital gains taxes previously caused market stagnation and reduced overall investment. Today, wary investors are holding back as they sense similar trends. Ignoring taxpayer sentiments risks repeating history, potentially causing long-lasting impacts on economic behavior.