Should Rachel Reeves consider a tax on overseas remittances?

[vladi]

The chancellor is exploring new opportunities (  and rightly so) for raising tax revenue in an endeavour to tackle the debt burden facing the nation. One think tank has floated the possibility of taxing  remittances  sent overseas by UK residents using a mix of formal channels  such as banks Western Union, MoneyGram, Wise and WorldRemit.  The proliferation of Western Union agencies has become notable in recent years.

It is estimated that  around £28.5 billion was remitted to such countries as India, Pakistan, Nigeria and  countries in the Caribbean.

Imposing such a tax could reduce capital outflows and result in greater investment here in the UK.

The USA is introducing a tax at the rate of 1% effective 1/1/2026. Canada, Oman and Saudi Arabia are expected to follow suit.

[alice]

That wouldn’t work people sending money have already paid tax on it

[vladi]

3 minutes ago, alice said:

That wouldn’t work people sending money have already paid tax on it

That assumption is not always valid

[alice]

Well, tighten up black market not punish those who  are already paying

[vladi]

On 09/09/2025 at 18:56, alice said:

Well, tighten up black market not punish those who  are already paying

What would you suggest that government should do to tighten up the black market? 

[jazzer]

Simple, just resign Rachel,, you've made things a million times worse. JUST GO, NOW. 

[malumbu]

Off topic Jazzer.  

[jazzer]

9 minutes ago, malumbu said:

Off topic Jazzer.  

Watch out , it's the forum police, be afraid, be very afraid, NOT.

[Sue]

42 minutes ago, jazzer said:

Watch out , it's the forum police, be afraid, be very afraid, NOT.

Oh FFS.

[vladi]

If not taxing remittances, then something should be about reducing the scale of these remittances. It represents negative investment in the UK to the amount estimated to be £28 billion p.a. That's equivalent to half the UK defence budget at a time when the fiscal deficit is massive and increasing. It is a crisis.
The last time there was a crisis similar to this was in the post war period.

For 3 decades post ww2, the UK enforced strict exchange control measures. These were designed to conserve foreign currency reserves, particularly U.S. dollars, which were vital for post-war recovery. The system restricted the movement of money abroad and tightly controlled foreign investment, overseas travel allowances, and imports. British citizens needed official permission to externalise funds. Exchange controls reflected the economic difficulties of the time, including balance-of -payments pressures.

[ianr]

On 09/09/2025 at 17:55, vladi said:

One think tank has floated the possibility of taxing  remittances  sent overseas by UK residents

Which think tank?  Why no link to what they have to say?

[jazzer]

So stop all transferring of funds out of the UK. Have you had a thought as to why people may be doing this, they've had enough of thieving Reeves and want to protect their funds, hence moving it over sea's and out of the reach of Reeves.

The 26th November will come around really quickly, then we'll become aware of what other actions Reeves is planning on taking to plunder all of us. The pot is only so deep and you can't get blood out of a stone. She'll actually create more austerity if she continues with her tax grabs. Rather than doing that, spend on essentials and not vanity projects.

The employers NI hike has had a detrimental effect with employers reducing vacancies and shedding labour. Does she not see that business creates growth and not the Government directly.

Her, Starmer, Streeting, Lammy and the rest of that motley crew need booting out of Government and be replaced by Badenoch and Stride who will stop the rot.

Before Starmer and crew came into office inflation was down to 2%, since then month on month it's increased to somewhere around 3.8% and is expected, nay predicted, to reach in excess of 5% at the current rate. as a result unemployment will further increase and that has to be paid for through DWP.

We are being gradually crippled by Reeves.   Crutches and walking sticks at the ready!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Edited October 1 by jazzer

[vladi]

20 minutes ago, jazzer said:

So stop all transferring of funds out of the UK. Have you had a thought as to why people may be doing this, they've had enough of thieving Reeves and want to protect their funds, hence moving it over sea's and out of the reach of Reeves.

 

Don't think they are externalising these billions to thwart Reeves.
They are doing it to build mansions in Lagos, Lahore, Hyderabad and the Caribbean . Plus set up businesses overseas , not the UK.
Plus of course externalise the proceeds from crime.

Twenty years ago, processors such as Western Union did not exist. Now they have outlets on every street. They externalise money without any controls.

It's gotta change to protect the UK economy.

[jazzer]

So you'd like to see people double taxed on the money they earn first and then on any funds they transfer overseas, that's unfair and unjust. 

[vladi]

Both France and Germany impose taxes on remittances above a certain amount.  Why not the UK?

[jazzer]

it doesn't matter what they do, we're talking here about the UK. 

Double taxing is immoral. not in keeping with "the we are for the working class2 clap trap. It's more like do as I say not as I do. Or in Rayners stance, I'll not pay the tax I'm due to pay or Starmer, I'll dodge £295k inheritance tax and buy my parents a donkey field. They're all donkey's who need being put out to pasture.  

[David Peckham]

9 minutes ago, jazzer said:

 

Double taxing is immoral. 

But we're double taxed, and more, on pretty much all 'non-essential' spending anyway.

As it's clearly 'disposable' income, a decent starting point would be to treat it as such and charge 20% on it, like VAT, then add in a number to factor in the lost multiplier effect from it leaving the UK economy.

It could be the only tax which actually has popular support.

Edited October 1 by David Peckham

[jazzer]

No.

[alice]

Vague memory of only able to take £50 out for summer hols

[David Peckham]

If that £28 billion was spent on, I don't know, Guinness in the EDT, it would raise cash through VAT and alcohol duty.

If it was invested, say in Diageo (the parent company of Guinness), those dividends would be subject to CGT.

I have no wish to pay more tax, but it seems like a significant loophole, and one that wouldn't affect me, so I'm in favour of it.
 

[vladi]

29 minutes ago, David Peckham said:

If that £28 billion was spent on, I don't know, Guinness in the EDT, it would raise cash through VAT and alcohol duty.

If it was invested, say in Diageo (the parent company of Guinness), those dividends would be subject to CGT.

I have no wish to pay more tax, but it seems like a significant loophole, and one that wouldn't affect me, so I'm in favour of it.
 

You got my point exactly. Sending money out of the country is disinvestment. Successive government's  here make a big noise about incoming investment by foreign businesses. but keep quiet about the outflow of £28.5 Bn annually by remittances.
Also £28.5 Bn is 4 times the UK foreign aid budget.

I can't recall any recent inflows matching that amount. No wonder the country is getting poorer by the day.

Edited October 1 by vladi
update on aid

[jazzer]

I'd have guessed a lot of these transactions are people sending funds overseas to support family in poorer countries and you think they should be taxed on that. so you want to see hard working possibly disadvantaged people double taxed? That is utterly nuts. 

And perhaps just to reiterate what I stated earlier, if people are taking money overseas, it is to keep thieving Reeves fingers well away from their hard earned £. 

[Jenijenjen]

2 hours ago, vladi said:

Plus of course externalise the proceeds from crime.

If this is true, they would have channels that would avoid any tax. Besides, I think proceeds of crime are more likely to flow into the UK

[vladi]

4 minutes ago, Jenijenjen said:

If this is true, they would have channels that would avoid any tax. Besides, I think proceeds of crime are more likely to flow into the UK

To help me understand your logic, can you mention a few countries from where the proceeds of crime would result as inflows to the UK.

[Jenijenjen]

"This lack of transparency means the scale of dirty money entering the UK is unknown, but experts estimate that it is in excess of tens of billions of pounds every year, aided by a network of bankers, lawyers, and accountants, who face few consequences."

https://www.transparency.org.uk/what-we-do/corruption-and-uk/stop-flow-dirty-money