Clegg revives battle on rich with raft of tax plans

Tim Wallace
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THE TOP 10 per cent of Britons should pay more in tax, the Deputy Prime Minister said yesterday, promising to become more creating in finding new ways to take money from the richest.

But finance analysts warned the move could simply drive cash and assets abroad, making the UK and the government worse off, rather than richer.

Clegg said a mansion tax – long-favoured by the Liberal Democrats – is not the only additional levy he is pushing for.

For example, he said further changes to stamp duty could raise more cash for the government, while higher council taxes could also hit the owners of expensive homes, and extra hikes in capital gains tax may also be considered.

The budget saw stamp duty raised to seven per cent on houses worth over £2m, but Clegg said more charges need to be levied.

“I think many people of considerable wealth in this country want to pay,” he told the Andrew Marr show yesterday

“The vast majority of people in this country won’t find it acceptable if further fiscal austerity was implemented on the backs of the poor.”

But financial consultants warned the move would prompt a tax exodus, driving wealthy individuals to move assets and funds out of Britain and into lower-tax jurisdictions.

“Attacking the wealthy will dampen the UK’s economic growth and job creation and will send capital overseas,” said deVere Group’s Nigel Green.

“The income that assets held in the UK generate is a great potential stream of revenue which would be compromised if those assets were moved overseas.”

“In addition, money held in the UK is a possible source of investment in British businesses which provide employment and income and boost consumer spending and tax revenues.”

Meanwhile Treasury minister Danny Alexander pledged to recruit an extra 100 tax inspectors as part of a new drive to reduce tax avoidance by those with assets of more than £1m. Previously only those with more than £2.5m have faced additional HM Revenue and Customs scrutiny.