Gen Z Budget ideas

Its Budget time again (27^th October) and in previous years we have issued our ‘Budget predictions’. This seems even more pointless than usual given the biggest tax rise in recent years was announced last month with the social care levy.

Yet we face a number of fiscal and economic challenges, post Covid and post Brexit. Headwinds would seem to understate the issues.

We therefore asked some of our new colleagues – those who have recently joined from school or university – about the issues they see as being important to them. What do tomorrow’s leaders believe our tax system should focus on?

We are just launching our campaign asking clients and stakeholders their views on ‘Shaping the Future’. We asked our new trainees as to their views on how the tax system should be shaped.

Fairness in the tax system

There is a wide perception that large businesses can legitimately avoid corporation tax by routing profits through low tax jurisdictions. This needs more active international management by Governments worldwide. The OECD has made a start with its Base Erosion and Profit Shifting programme – ‘BEPS’ – but needs to go further.

A bigger issue is the taxation of wealth. Income that arises is generally taxed somewhere. What is not taxed is the increase in wealth by the ultimate owners unless and until that is realised.

Buying the first home

For many Gen Z’s the prospect of buying a home is a distant pipe dream. Building more homes is only one element in solving the problem. We point out each year that Stamp Duty holidays only succeed in increasing prices, not reducing the overall cost to first-time buyers.

We have had the 3% second property surcharge for many years, but this has not hindered the growth in second homes.

Our colleagues have suggested a more fundamental and creative approach. Increase the surcharge to 25%. This would change the economics of second home acquisition.

Climate change

Climate change is the number one issue for Generation Zs; it should be the number one issue for us all.

The UK Government (or whatever colour) have been tinkering at the edges of the tax system for many years in attempting to change behaviours. There should be a root and branch review to the tax system to encourage a green agenda.

Entrepreneurship and productivity gains

The recent debate on immigration and skills requirements in the UK has highlighted the productivity gap the UK faces against many of our competitors. We frequently hear complaints as to the lack of business ‘unicorns’ founded in the UK as against say the US.

We should encourage entrepreneurship and risk taking in our younger generation. This could be by reducing tax rates by age, whether for income or corporation tax. There could be dedicated seed funding for young entrepreneurs. More interestingly, could the Government use student debt as part of the seed funding, with repayment from business profits or sales?

These are not our ideas. These are the ideas of our younger colleagues. Let us hope they get to Shape Their Future.

Join our Budget question time – connecting the dots webinar on Friday 29 October 2021.

To learn more about the topic explored in this article, contact us here.