Would an annual wealth tax really raise 拢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 in recent days and weeks, with some 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 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 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:

• Administrative costs: Regular asset valuations would be required. This would be practically difficult to achieve for unlisted businesses in particular who might need to obtain an independent valuation each year. HMRC would also likely need significant amounts of additional resources to cope with this demand.
• Liquidity concerns: It may not be possible to pay the tax easily if the value is tied up in assets. It might also be difficult to arrange for a wealth tax to be paid in instalments, over time, if it was an annual tax.
• Behavioural changes: At the time of the research in 2020, it was suggested that there were around 22,000 individuals in the UK with wealth over £10m. Given this relatively small number of taxpayers that might be impacted, it may not take a lot to alter their behaviour. For example, a high threshold for an annual wealth tax of £10m could lead to families splitting their wealth between them to fall beneath this. The report notes that evidence from other countries suggests 7-17% of the initial tax base could be lost to avoidance at a 1% annual wealth tax rate. 

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.