UK May Have Passed Tax Revenue Peak, Warns Laffer Curve Advocate

Facing a budget in a month, the Treasury is constrained by borrowing above target and rising inflation, limiting fiscal options. Drawing on Art Laffer’s theory, the author warns that the UK may have exceeded the tax rate that maximises revenue, so further hikes could reduce receipts. Claritas Tax notes the top-1 % of earners contributed 30.7 % of income tax in 2020-21, dropping to 26.6 % in 2025-26, while corporate-tax growth has slowed after the main rate rose to 25 % in 2023.

Stamp-duty revenue fell from £4.8 billion in 2000 to £4.32 billion now, and property sales have declined, cutting related taxes. High-net-worth individuals such as Sir Jim Ratcliffe and Chris Rokos have moved to Monaco and Greece, relying on costly legal defenses. A recent national-insurance increase added £25 billion but pushed up prices and risked jobs. The author urges John Healey and Andy Burnham to heed these signals before the October 28 fiscal plan.