Support for a new wealth tax is growing. Unite, the UK’s second biggest union, this week came out in favour of a new tax on the super rich.
Unite wants to see a 1% tax on people who have £4 million or more – to raise £25 billion a year. Their message has been all over the media, raising public awareness of wealth taxes.
Unite’s general secretary Sharon Graham, who represents 1.2 million members, used the front page of the Sunday People to call for the new tax.
“People are not going to accept austerity mark two,” Graham said, talking about cuts to the winter fuel payment.
“We need serious investment in our crippled public services and in industry to ensure a prosperous future for Britain’s workers and their communities. We won’t get the money needed for that just by waiting for growth”, she told The Guardian.
We helped convince unions
Unite’s intervention comes as unions from up and down the country meet in Brighton for the Trade Union Congress (TUC)’s annual conference this week.
The conference passed a motion for a wealth tax on Monday. It was proposed by Unite and the RMT, while other unions put their support behind calls for a fairer economy and taxes.
Unions represent millions of workers up and down the country. We’ve been working hard behind the scenes to get them to support wealth taxes for years. This is a good example of how we’re building a broad movement to back change.
This vote at the TUC is a huge leap forward for our campaign – and a big step towards making wealth taxes a reality in the UK.
We wholeheartedly back Unite and other unions’ call for a wealth tax.
Tax evasion is growing
The government must raise more revenue from new taxes, such as a wealth tax and wider tax reform. Yet they must also ensure existing taxes are paid correctly.
Tax evasion deprives our public services of money they desperately need. It’s also deeply unfair on everyone who pays their taxes.
A new report by the National Audit Office has found tax evasion is a growing problem in retail, particularly among small businesses.
£5.5 billion was left uncollected in 2022-23 because of tax evasion, HMRC estimates. Small business accounted for 81% of the total, up from 66% on 2019-20 figures.
While other research earlier this year uncovered that HMRC hasn’t charged a single company for corporate tax evasion using new powers it was given in 2017.
The Bureau of Investigative Journalism and TaxWatch, also found that just 11 wealthy people were prosecuted for tax fraud by HMRC in 2022.
The tax authority appears to be struggling to act as an effective deterrent to tax evasion. But why?
A simple solution
HMRC is chronically underfunded. It needs more resources in order to properly investigate tax evasion.
As our deputy director, Sara Hall, told the Guardian “It is no wonder that billions of pounds of tax is evaded each year.”
“Providing the tax office with the resources it needs will enable it to collect significant sums that can help repair public finances and invest in the NHS, local councils and the key services we all rely on.”
Investing more in HMRC makes financial sense. TaxWatch estimate that for every £1 invested in HMRC tax compliance, £14 is recovered in additional tax revenue.
The government promised to better resource HMRC in their manifesto, so we’ll keep campaigning on this issue and hold them to account.