UK consumers call for loan shark tax

Many consumers are calling on the Chancellor to use his upcoming Pre-Budget Report to introduce a new tax on companies who sell high interest loans.

New research commissioned by accountants and business advisers BDO Stoy Hayward released today reveals this would be one of the most popular moves Gordon Brown could make.

The polling of over 2000 individual taxpayers, identifies a growing belief that the Government needs to act to deter consumer debt by taxing the companies who provide high interest loans. Surprisingly, tackling personal debt is now the third most important issue to UK taxpayers, behind only changes to income tax and inheritance tax.

Consumer debt in the UK has recently exceeded £1 ¼ trillion, increasing at 10% on the previous year. And the UK is now responsible for a third of all unsecured debt in Western Europe, with the average UK consumer owing over twice as much as their Western European counterparts. The results come just days after the Conservatives announced a blueprint to tackle the problem of high personal debt.

Stephen Herring, Tax Partner, BDO Stoy Hayward remarked: “As personal insolvency in the UK reaches an all time high, consumers are calling for the Government to intervene and penalise those finance providers they feel are making money out of consumer debt, presumably through irresponsible lending.” However, only 1% of those surveyed thought the Chancellor actually would introduce legislation taxing companies offering high-interest loans, with most expecting an increase in road tax.