Thursday 09 July 2026 9:17 am  |  Updated:  Thursday 09 July 2026 9:18 am

Fixing the £100,000 tax trap would be a bold first step – let’s not undermine it by taxing investment more

By: Michael Healy

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Lord O’Neill is right to call for reform of the £100,000 tax trap, but taxing capital gains more heavily could end up costing the Treasury £8bn, says Michael Healy

This week, a group of leading economists led by Lord O’Neill called for a fundamental overhaul of the UK’s tax system. Their argument that Britain has created an overly complex, anti-growth tax system is an understatement of epic proportions. While it was particularly welcome to see reform of the £100,000 tax cliff edge on their agenda, their reported suggestion to bring investment gains closer to income tax rates would be the wrong move. If we want the UK to catch up with countries where investing is far more commonplace, we need a tax system that encourages people to put money to work for the long-term, not one that makes investing less attractive.

Let’s start with where Lord O’Neill is absolutely right.........

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