Changes to stamp duty and business rates have left the British tax system ‘unbalanced, warns former Chancellor Norman Lamont
Changes to how Stamp Duty is levied on property sales has left Britain with an “unbalanced” tax system, a former Conservative Chancellor has said.
Speaking on the eve of the Budget, Lord Lamont of Lerwick said he was “concerned by the impact of stamp duty on the housing market”.
The Daily Telegraph launched a campaign last year after it emerged that stamp duty reforms introduced by the Government in 2014 had slowed the housing market and raised half as much money as forecast.
Treasury officials are understood to have reviewed the impact of the stamp duty changes in recent weeks but Philip Hammond, the Chancellor, has decided against taking any action in Wednesday’s Budget.
The peer’s remarks came after the Institute for Economic Affairs warned that stamp duty “reduces labour mobility and also makes it more expensive for people to downsize or move home for other reasons”.
Lord Lamont told a meeting organised by Leave Means Leave that while income tax rates and corporation tax “are pretty competitive … we are putting tremendous pressure on other taxes”.
He added: “You mention for example stamp duty, we all know about the controversy over business rates – the system is in danger of getting a bit unbalanced.”
Lord Lamont – who was Chancellor from 1990 to 1993 – also raised questions about whether Britain could be a low tax economy after Brexit, as has been mooted by current Chancellor Philip Hammond.
Under the reforms, in December 2014, the long-standing “slab” system, with homebuyers charged a percentage of the full purchase price as soon as it hits certain thresholds, was scrapped.
Instead, the former Chancellor created a “slice” approach, with different percentage rates applied to each portion of the price.
There is no levy under £125,000, then two per cent up to £250,000, five per cent up to £925,000, 10 per cent to £1.5 million, and 12 per cent above that.
Campaigners for change are now hoping that Mr Hammond will review Stamp Duty in November, when he will unveil a combined Budget and Autumn Statement.
March 6th, 2017: Telegraph