You’ll have to pay more tax to balance the books, warns IMF

Britain must raise taxes to balance its books by the middle of the next decade, the international Monetary Fund said yesterday.

in a stark warning that will alarm families already facing the highest tax burden for 50 years, the global financial watchdog said spending cuts to public services have gone about as far as they can.

it called for wealth taxes on property and higher taxes on the self-employed, as well as scrapping the ‘triple-lock’ that protects pensioner incomes.

the suggestions will prove controversial and difficult to implement, as attempts to raise taxes in the past, especially on the self-employed, have proved disastrous for chancellors.

Office for Budget responsi- bility figures show the treasury will collect taxes worth 34.3 per cent of national income in 2020-21 – the most since 1969-70.

the iMF report underlined the scale of the problem facing Britain, suggesting that tax rises would be needed as an ageing population puts strain on the public finances by pushing up the cost of health and social care. iMF managing director Christine Lagarde said: ‘We believe there is not that much space for additional spending cuts and that the revenue side of the equation has to be looked at.

‘the UK may face difficult decisions about the size of its public sector.’

the iMF said Britain must also bring its ballooning national debt under control, which has swelled to £1.8trillion, as the borrowing binge has left the country with little room for manoeuvre when the next financial crisis strikes.

it backed Chancellor Philip Hammond’s plans to balance the books by the middle of the next decade – although it is feared Britain will not return to the black until 2030.