Why hiking taxes is not the answer to solving the money crunch

Short sighted tax rises which generate relatively minor tax yields, and which store up a much bigger problem for the future should not be the go-to solution, say leading tax and advisory firm Blick Rothenberg

Robert Pullen a partner at the firm said: “ The Government might be eyeing up longer-term structural changes to the tax system (and pensions relief might be in that category), but doing so now would be a huge gamble.

“ It is likely that any changes announced in the Budget will “pave the way” for a bigger announcement in the Spring.”

He added: “ Inevitably, tax rises are now being mooted and there is much speculation that the forthcoming Budget will bring sweeping changes. Only recently, the chancellor was seen to be carrying a draft speech setting out possible tax rises. This has heightened the anticipation of a change to the tax rules.”

Robert said: “ The immediate focus appears to be on capital taxes, with inheritance tax and capital gains tax under the spotlight. Both these taxes bring in very little revenue, at £5bn and £10bn respectively, and so any change will barely make a dent against the estimated £2tn debt pile.