The hidden Labour tax raids no one is talking about

Pensioners may be right to fear their winter fuel payment is just the beginning

We are still more than a month away but Budget speculation is in full flow. The Chancellor has been crystal clear that she will be making more “difficult decisions” and that means taxes will be going up. 
Entrepreneurs and business owners are therefore right to worry that capital gains tax or employer National Insurance contributions will increase. And pensioners can justifiably fear that losing their winter fuel payment won’t be the last time they are targeted as those hoping to pass on something to their family are likely to see a bigger inheritance tax bill.  
Those are the potential tax increases everyone is talking about. That’s not surprising, given they could raise substantial amounts of money and hit millions of people. But there are others that aren’t being debated that could hit businesses and hard-working families up and down the country.
Many of these are either temporary tax cuts or freezes that are due to run out unless the Chancellor decides to carry them on. The biggest of these is the 75pc business rates relief provided to retail, hospitality and leisure companies. 
This is worth £2bn-£3bn to the pubs, shops and restaurants that benefit from it – and therefore ending it represents a significant saving to the Government. 
Without it, though, the tax bills of thousands of businesses will soar. Labour has pledged to overhaul the business rates system but that work will take years. If this relief comes to an end, the impact will be almost immediate.
Related to this is the annual decision regarding the business rates multiplier, which is used to help calculate properties’ tax bills. It has been frozen for small businesses for four years in a row but went up by inflation for larger companies last autumn. 
Larger businesses should be prepared for another inflationary increase. But pressure to return to the normality of uprating the multiplier for small businesses with inflation will be significant. Combined with ending the relief for retail, hospitality and leisure, this would be a hammer blow to high streets across the country. 
In a similar vein, alcohol duty is frozen until February 2025. As next year’s spring statement will be after the freeze is due to end, Treasury officials will be advising the Chancellor to decide what she wants to do on this and announce it at the Budget. 
The industry will also be asking for clarity, but I don’t imagine they’ll like the answer.  I’m sure duties will rise by inflation, if not more. And as for the Brexit Pubs Guarantee, which guaranteed that pubs pay lower alcohol duty than supermarkets, I fear that will have been short-lived.   
First-time buyers’ relief is also scheduled to change in April. This currently means that first-time buyers pay no stamp duty on the purchase of a property up to a value of £425,000 and 5pc on properties between that and £625,000. The Chancellor could wait until the spring statement before announcing this is ending, but given that it is worth another £2bn it will be tempting to bank the savings now.  
Finally in the category of “temporary” tax cuts that are due to end is one that has caused some concern but isn’t being talked about anywhere near enough. That is the likely increase in fuel duty. Reversing the 5p cut and uprating for inflation will raise the best part of £3bn next year. 
The pressure from Treasury officials to make this change will be intense, despite it obviously being paid by working people and it being seen immediately at the petrol pump. Civil servants will no doubt be arguing that if it isn’t increased now – at the start of a Parliament with a big majority and a £22bn “black hole” that needs repairing – then it will never be increased.
But doing so would prompt the next winter fuel payment-type backlash. 
If the Chancellor really wants to scrape the tax barrel dry then she will also no doubt be looking at above inflation rises to a whole set of other “sin” taxes. Tobacco duty is always seen as a relatively straightforward tax grab, as are gambling taxes. A larger amount could also be raised from Air Passenger Duty. 
Non-economy flights saw an increase in the last Budget but more could be raised from economy flights if the Government wanted.
This is all to say that away from the headline tax rises that everyone is rightly worried about there are many others worth billions of pounds a year that the Chancellor could try to sneak through. After the backlash caused by the winter fuel row, the government may be reluctant to make big changes to highly visible taxes. 
In which case, watch out for these lesser-known rises. They will be equally painful. 
Adam Smith is the former chief of staff to Jeremy Hunt.