The UK government is exploring a major overhaul of its wealth tax system, proposing a simpler and more efficient alternative to the current complex framework. According to sources, the new approach aims to reduce administrative burdens while ensuring a fairer distribution of tax obligations.
Why a New Wealth Tax?
Experts argue that the existing system is riddled with loopholes and inconsistencies, allowing wealthier individuals to minimise their contributions. The proposed reform seeks to close these gaps while making compliance easier for taxpayers.
Key Features of the Proposal
- Flat-rate structure: A single rate applied to all qualifying assets.
- Broader base: Fewer exemptions to ensure wider participation.
- Automated reporting: Integration with existing financial systems to reduce paperwork.
Potential Impact
If implemented, the new system could generate significant additional revenue while reducing enforcement costs. Critics, however, warn that any wealth tax risks capital flight if not carefully designed.
The Treasury is expected to publish a consultation paper in the coming weeks, with draft legislation possible by next year.
