It comes after a report from the University of Warwick and the London School of Economics, funded by the Economic and Social Research Council, suggests a 1% wealth tax for five-years on net assets above £500,000 would raise more than £260bn for the UK’s response to the Covid-19 pandemic.
However, despite the AAT recognising that there will “inevitably be a need to repay the cost of the many programmes introduced in response to the ongoing Covid-19 pandemic in order to help the UK’s economic recovery” it does not believe a wealth tax would be the most conducive move.
Adam Harper, director of Professional Standards and Policy, said: “Despite a recent YouGov poll suggesting 61% of UK adults would support the introduction of a wealth tax, 75% of those surveyed believed it would be fairer to tax income than wealth.
“Those findings were also based on excluding pensions and the main home, which would inevitably create distortions, with increased wealth invested in homes and pensions. Additionally, wealth is currently taxed through several means including income tax, capital gains tax and inheritance tax, so a further wealth tax may well be unnecessary.”
He added: “If there is a strong desire to ensure the wealthiest in society contribute more to the costs incurred due to the pandemic, the government should look at introducing a legally binding executive pay ratio.
“This was supported by 90% of AAT members and 57% of the public at a maximum ratio of 20:1 and would echo frontrunner UK and international organisations including AAT, as well as going further than the existing legal requirements on publishing executive pay.”
Instead, the AAT said the chancellor, HMRC and the UK government should look at the effectiveness of existing taxes and “consider improving them”.