Rachel Reeves is looking for taxes to raise, rather than ones to abolish. Never mind: here is a tax that ought to be scrapped by a government that calls itself pro-growth, pro-business and pro-investment, which was the pitch at this week’s big summit. What’s more, the enticing claim from abolitionists is that getting rid of the tax could – with a few qualifications – pay for itself over time because other Treasury receipts would rise.
The tax is stamp duty on shares – or, in full, stamp duty reserve tax, or SDRT. It is the 0.5% levy on purchases of shares in UK companies that brought £3.8bn into the Treasury in the 2022-23 tax year. Ireland has a higher rate, 1%, but nobody else does. The US, China and Germany don’t impose any equivalent tax at all. So the claim that the UK is at a competitive disadvantage in attracting listings and liquidity to its stock market looks solid. At a moment of panic over the sleepy state of London, especially at the bottom half of the stock market, that point ought to resonate.
