Introduce annual wealth tax: note

Central fiscal result

-£30.0bn - Net fiscal impact in 2028-29

Low case: -£70.0bn. High case: +£5.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Models introduce annual wealth tax by 2028-29.
• Baseline is current policy or published departmental plans.
• Central case uses published party or official anchors where available.
• Wider manifesto interactions are excluded unless stated.

Affected population

• Affected units are people, firms, households or providers depending on policy.
• Direct exposure follows the manifesto or government target group.
• Indirect exposure includes suppliers, workers, consumers and taxpayers.
• Weakest counts are widened in the low and high cases.

Gross impact

• Published anchor or scenario central is +£30.0bn in 2028-29.
• Gross costs or receipts are adjusted for behaviour and delivery risk.
• Tax, benefit or procurement offsets are separated in the fiscal build-up.
• The range is deliberately wider where implementation detail is thin.

Fiscal build-up, central case

• Gross tax or receipt yield: -£37.5bn
• Behavioural and avoidance response: +£6.0bn
• Administration and compliance cost: +£0.1bn
• Other tax-base interactions: +£1.4bn

Central net impact: -£30.0bn in 2028-29.

Behaviour and pass-through

• Low case assumes stronger delivery or receipts than central.
• Central case applies moderate behavioural leakage and pass-through.
• High case allows weaker delivery, larger take-up or higher costs.
• Output effects follow incidence, capacity and investment channels.
• Distributional gains do not automatically imply GDP gains.

Phasing

• 2026-27: -£3.0bn. Phased implementation and take-up.
• 2027-28: -£16.5bn. Phased implementation and take-up.
• 2028-29: -£30.0bn. Phased implementation and take-up.
• 2029-30: -£30.0bn. Phased implementation and take-up.

Main source groups

• Institute for Fiscal Studies, "Green Party manifesto: a reaction" (2024): IFS judged Green tax and spending plans very large and difficult to deliver at claimed yields; supports sceptical revenue and behavioural assumptions.
• Local Government Association, "Green Party manifesto summary" (2024): Used to define the pledge wording, policy scope and implementation scenario being modelled.
• Jakobsen, Jakobsen, Kleven and Zucman, "Wealth Taxation and Wealth Accumulation" (Quarterly Journal of Economics, 2020): Wealth taxes affect reported wealth and accumulation, with avoidance and valuation issues material; supports cautious wealth-tax revenue ranges.
• Seim, "Behavioral Responses to Wealth Taxes" (American Economic Journal: Economic Policy, 2017): Taxpayers respond to wealth taxes through avoidance and reporting behaviour, not only real saving; explains why claimed yields may be overstated.
• Advani, Chamberlain and Summers, "A Wealth Tax for the UK" (Wealth Tax Commission, 2020): The commission favoured a one-off wealth tax over an annual one because enforcement is difficult; useful UK-specific caution on annual wealth taxes.
• HMRC, "Direct effects of illustrative tax changes" (2025): HMRC publishes direct-effect tax-change estimates but warns large reforms are not simple linear scalings; anchors tax-yield scale and supports wider uncertainty ranges.
• Green Party of England and Wales, "Manifesto for a Fairer, Greener Country" (2024): The manifesto defines the tax, spending, climate, housing and public-service proposals modelled here; used to define the scenario, not as an official costing.