Soon-to-be Scrooge Sunak’s Summer Statement will spook higher earners

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09 Jul, 2020

Soon-to-be Scrooge Sunak’s Summer Statement will spook higher earners

Rishi Sunak’s Summer Statement can be expected to spook many higher earners into considering the available international financial planning options, affirms the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The comments from Nigel Green, chief executive and founder of deVere Group, follows the UK Chancellor’s so-called ‘mini Budget’ in which he announced a raft of measures to help the UK economy recover from the worst effects of coronavirus.

Mr Green notes: “The Chancellor Rishi Sunak has set out a series of extra measures to help kick-start the UK economy, whilst revealing that the Treasury has allocated £188bn of economy-bolstering measures since the start of the Covid-19 pandemic. 

“He has galvanised his position as Santa Sunak and has, rightly, been praised for his handling of the economy; he has done an impressive job. 

“But what happens when, in the Budget in November, he is forced into becoming Scrooge Sunak to pay for his record-beating level of support measures.”

He continues: “Many higher earners and investors will now be looking forward and thinking that the result of Sunak’s largesse, inevitably, means higher taxes to help plug the enormous £300bn blackhole in government coffers.

“Taxes on income contribute the highest proportion of the government’s tax-take, meaning even a small change would have a disproportionately positive impact for the Treasury.

“But they will not want to be hitting household incomes too much at this stage, as it will move to raise taxes in the medium to longer-term in order to indicate to financial markets that they are intent on controlling the deficit.

“There is also the potential of the oft-mooted one-off or continual tax on personal wealth.” 

Mr Green goes on to add: “This can all be expected to spook higher earners into considering the available international financial planning options.”

Back in May, the deVere boss said: “It is almost inevitable that pension tax relief will be a target as the government looks to plug gaps in November’s Budget.

“As it’s likely the pension contribution relief for those on higher incomes will be reduced, an increasing number of people are now mulling making a larger one-off contribution before the Budget, in order to benefit from the higher tax relief whilst they still can.”

Nigel Green concludes: “We’re in highly unusual times economically and taxes will need to be raised to fund the gap. Those who will be likely expected to carry the burden can be expected to be exploring all the legitimate financial planning options, including international ones, to safeguard their wealth.”