- Rachel Reeves faces a potential £40 to £50 billion budget shortfall.
- A proposed solution is to apply VAT to financial services, which currently do not charge VAT.
- This exemption benefits the wealthy, as they use financial services more.
- Charging a 20% VAT on these services could generate £8 billion annually.
- The tax would primarily affect the wealthy, not ordinary people.
- The issue is framed as one of social justice.
- The decision involves whether to tax the wealthy or protect financial services in the City.
Source: taxresearch.org.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
