One of the most cunning tricks up the sleeves of the Exchequer is so-called “fiscal drag”: the way that the government can raise more income simply through inflation.
That is because unless tax thresholds rise in line with prices, people slip into higher bands: for example the upper rate of income tax. And they may not even notice.
It is a politically less painful way of raising extra tax than by visibly lifting rates at Budget time.
Property is a case in point: According to new research published today, the Treasury could see an extra haul of £2bn a year through stamp duty if house prices continue to rise as anticipated by experts.
The research has come from the Taxpayers’ Alliance, who are campaigning actively against stamp duty. Read more