Apply NI to investment income: note

Central fiscal result

-£20.0bn - Net fiscal impact in 2028-29

Low case: -£40.0bn. High case: -£5.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Models apply ni to investment income 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 +£20.0bn 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: -£25.0bn
• Behavioural and avoidance response: +£4.0bn
• Administration and compliance cost: +£0.1bn
• Other tax-base interactions: +£0.9bn

Central net impact: -£20.0bn 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: -£2.0bn. Phased implementation and take-up.
• 2027-28: -£11.0bn. Phased implementation and take-up.
• 2028-29: -£20.0bn. Phased implementation and take-up.
• 2029-30: -£20.0bn. 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.
• Mirrlees and review team, "Tax by Design" (Institute for Fiscal Studies, 2011): Efficient tax systems should avoid narrow bases and poorly targeted reliefs that distort decisions; useful benchmark for judging tax-base changes and exemptions.
• Saez, Slemrod and Giertz, "The Elasticity of Taxable Income with Respect to Marginal Tax Rates" (Journal of Economic Literature, 2012): Higher marginal rates can raise revenue but behavioural responses and avoidance become important at the top; supports wide ranges for high-income and capital-tax measures.
• 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.