Desktop Banner

Mobile Banner

Would an annual wealth tax really raise £460m a week?

As the Chancellor puts the final touches to her Spring Statement, a fleet of mobile billboards has reportedly been commissioned by the campaign group Patriotic Millionaires UK that suggest the lack of a wealth tax means the country is missing out on £460m a week.

That equates to approximately £24bn annually, and this claim has been repeated by some MPs in recent days and weeks, with some posing in front of the mobile billboard itself. With the Spring Statement imminent on 26 March 2025, many may be hoping that the Chancellor has a change of heart and looks into a wealth tax to raise funds for the Exchequer rather than looking at potential spending cuts.

But does the £460m a week claim stand up to scrutiny? The figures appear to be based on a high-level online calculator that suggests a 2% annual wealth tax payable by individuals with wealth over £10m could raise around £24bn per year.

What is not clear from the billboard and its £460m-a-week claim is that the research behind this calculation, a report by the Wealth Tax Commission published in December 2020, expresses serious concerns about the merits of introducing an annual wealth tax. Instead, it is recommended that other options, including reforming inheritance tax and capital gains tax, should be explored in priority to an annual wealth tax and that if a wealth tax were to be introduced then there is a stronger case for this to be a ‘one-off’ tax. Indeed, the main focus of that report was on the merits of a ‘one-off’ wealth tax that could bolster the government’s balance sheet after the pandemic and how it might operate, not an annual wealth tax.

The concerns raised in the research regarding an annual wealth tax might be summarised as follows:

Whilst an annual wealth tax might theoretically raise the sums advertised, the reality is that this is highly uncertain. It would be difficult to administer and it could result in many taxpayers changing their behaviour to avoid the charge.

It is not the first time that eye-catching claims about government funds have been made on vehicles touring the country. The difference this time is that these vehicles may have an increased air of scepticism following them around.

authors:chris-etherington