Background:
- Ahead of Friday’s mini-budget, HM Treasury is considering changes to stamp duty land tax (SDLT) as part of their growth plan.[1]
- The TaxPayers’ Alliance dynamic tax model shows that SDLT has a deleterious effect on growth, investment and average weekly earnings if the current system remains in place.
- The revenue raised is forecast to be £20.8bn in 2026-27 and is expected to grow every year from 2021-22.[2]
Key findings:
- If SDLT – and Scottish equivalents – were not in place, by 2029 GDP would be £27 billion higher, investment up by £7bn and average weekly earnings £6 greater.
- The effects are most acute with investment. Compared to the baseline scenario, investment spending would be 2.29 per cent higher were SDLT not in place and GDP would be 0.85 per cent higher by 2029.
- The baseline scenario means what the economy is expected to look like if tax changes were not implemented.
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[1] Swinford, S. & Zeffman, H., Liz Truss to cut stamp duty in push for prosperity, The Times, 21 September 2022.
[2] Office for Budget Responsibility, Public finances databank – August 2022, 14 September 2022, https://obr.uk/download/public-finances-databank-august-2022/, (accessed 21 September 2022).