✈️ Britain Likely to Lose 1 in 6 Millionaires by 2028

📰 Industry News

• Holiday rental platform AirBnB shares drop 12% as company flags weakening US demand. The company reported second-quarter profits of $555m compared with last year’s $650m. (The Guardian)

• The new Labour government has shelved £1.3bn of funding promised by the Conservatives for tech and Artificial Intelligence (AI) projects. The funds were unveiled less than 12 months ago. (BBC)

• B&Q has partnered with Deliveroo to offer Londoners access to on-demand delivery of over 600 DIY products from their nearest B&Q Local store in as little as 25 minutes. (The Retail Bulletin)

• Domino's Pizza Group has announced it is aiming to continue expanding by opening a total of 70 new branches across the UK this year. (Sky)

🤵‍♀️ Most Popular Job Searches of 2024 Revealed

A new study by CV-Library has uncovered the trending job searches for 2024, with a few surprising additions:

The top job searches so far in 2024 are:

1. Data Management Officer: Oversees and manages data systems to ensure accurate and secure information handling.

2. Theme Park Historical Character: Portrays historical figures to entertain and educate visitors at theme parks.

3. TikTok Presenter: Creates engaging video content for TikTok to promote brands and connect with audiences.

4. CCTV Controller: Monitors and operates CCTV systems to ensure public safety and security.

5. Customer Contact Advisor: Handles customer inquiries and provides support through various communication channels.

6. Head of Social Sustainability: Develops and implements strategies to promote social responsibility and sustainable practices within organizations.

7. Packaging Operator: Manages the machinery and processes involved in packaging products for distribution.

8. Food and Beverage Team Member: Prepares and serves food and drinks in restaurants, cafes, or other food service establishments.

9. Manual Line Operator: Works on a production line performing manual tasks to assemble or process products.

10. Inventory Operator: Tracks and manages stock levels, ensuring accurate inventory records and efficient supply chain operations.

The study, which analysed over 900,000 job listings on the CV-Library platform since January 2024, showed the diversity in job searches with a mixture of traditional and unconventional career preferences among UK job seekers.

✈️ Britain Likely to Lose 1 in 6 Millionaires by 2028

According to a recent UBS Global Wealth Report, Britain will lose almost one-sixth of its U.S. dollar millionaires by 2028. This decline contrasts with the projected growth of millionaire numbers in other countries, such as the United States and Taiwan.

Key Points:

• The Decline in Millionaires: The number of dollar millionaires in Britain is expected to drop by 17%, from 3,061,553 in 2023 to 2,542,464 in 2028.

• Global Trends: While the UK sees a decline, the U.S. will see a 16% increase, Germany 14%, and Taiwan 47%, driven by its booming microchip industry.

• Impact of Policies: Changes in UK tax policies, such as the abolition of the "non-dom" status and proposed taxes on private schools, have contributed to this trend.

Why This Matters

The Economy

The projected exodus of millionaires from the UK reflects broader economic and policy turmoil that could impact the country's wealth distribution and financial health. Millionaires contribute significantly to the economy through investments, spending, and taxes. Their departure could lead to reduced economic activity and lower tax revenues.

Policy Impact:

The exodus is partly due to UK policy changes aimed at wealth redistribution, such as scrapping the "non-dom" status. These policies may deter foreign millionaires and high-net-worth individuals from settling in the UK, as they seek more tax-friendly environments like Dubai and Singapore.

The Bottom Line:

The anticipated decline in Britain's millionaire population by 2028 is significant for several reasons and reflects poorly on the new labour government. It shows the impact of national policies on wealth retention and attraction, the global competition for high-net-worth individuals, and the broader economic consequences for the UK. Millionaires play a crucial role in stimulating economic growth, and their migration to other countries will eventually lead to a notable shift in economic power and activity.

✂️ Prediction: What Taxes Will The Chancellor Raise This October?

With a new Labour government in place, they have made clear that they are inheriting the worst finances in decades. With a 22 billion black hole to fill in the country’s finances, the new Chancellor of the Exchequer, Rachel Reeves, has said she will announce tax rises in the budget speech this October.

With a commitment not to raise taxes for everyday 'working people', the focus turns to other potential areas for revenue generation. So where will the money come from? Here’s what I think…

The Potential Tax Increases

1. Stealth Tax through Fiscal Drag One approach is by extending the freeze on income tax and National Insurance thresholds beyond 2028. This would subtly increase tax revenues without an explicit tax hike, as rising wages push more people into higher tax brackets - a phenomenon known as "fiscal drag." The Resolution Foundation estimates this could generate about £40 billion by 2028, potentially addressing the current fiscal shortfall.

2. Capital Gains Tax (CGT) Increase Reeves might consider raising the rates on capital gains tax, which is currently lower than income tax rates. Just on Tuesday this week the Chancellor refused to rule out an increase.

Capital Gains are charged on profits from the sale of assets like stocks or second homes. Increasing CGT could level the playing field but may also deter entrepreneurs and investors. Despite potential resistance from business groups, this measure could raise significant revenue.

3. Reducing Pension Tax Relief Currently, pension contributions receive tax relief at the saver’s income tax rate. Introducing a flat rate of pension tax relief could save billions, according to the Institute for Fiscal Studies. However, this move might discourage retirement savings and be challenging to implement.

4. Raising Inheritance Tax Inheritance tax, charged at 40% on estates above £325,000, could be another target. By raising the rate or reducing exemptions on assets like agricultural land or unquoted shares, Reeves could increase revenue from this source, although it currently affects fewer than one in twenty estates.

5. Reforming Council Tax and Business Rates Council tax, based on outdated property values from 1991, is often criticized. Reforming it to reflect current values or moving to a proportional land tax could raise additional funds. Similarly, altering business rates to be based on land value rather than property rental value might also be considered.

6. Stamp Duty Adjustments Stamp duty, charged on property transactions, discourages home sales. Transforming this tax to an annual land value tax could alleviate this issue, although it might be a tough policy to sell to the public.

Why This Matters

Economic Impact: Tax changes can significantly influence economic behaviour. Raising CGT might deter investment, while changes in pension relief could affect savings rates. Fiscal drag through threshold freezes is a less noticeable but effective way to increase revenue without a direct tax hike. That could be the party's best option.

Policy Motivations: Labour's stance against raising taxes for working people necessitates looking elsewhere. By targeting wealthier individuals and higher-value transactions, the government aims to balance fairness with revenue needs, without driving millionaires and other wealthy players away from the UK.

Rachel Reeves' budget decisions will be closely watched as they walk the fine line between necessary fiscal measures and maintaining economic competitiveness. The choices made could shape the UK's long-term financial landscape for years to come. But if they get it wrong, they will be held to account for their actions by the public at the next general election.

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