UK TAX SYSTEM IS “BROKEN”: Tax Expert Dan Neidle on Budget 2026 | Electric Car Charges & Mansion Tax

In this interview, Dan Neidle, a leading tax lawyer and expert, speaks to ITV's Political Editor, Robert Peston, to analyse the tax-raising measures proposed in the Chancellor’s Budget for 2026.

Neidle critiques the government's approach, arguing that the tax system is "broken" and that the Budget missed an opportunity for "serious reform" that could drive economic growth.

Neidle begins by noting the widespread agreement among think tanks, both left and right, that the UK's tax system (including Property Tax, Corporation Tax, and VAT) is overly complex and inefficient. He argues that the government’s failure to address fundamental issues means a significant chance for tax reform has been missed.

The conversation delves into the expected revenue from the newly proposed tax measures, as visualised in "The Eye of the Neidle" chart:

Mileage Charge on Electric Cars = £1.4 billion:
Neidle discusses the motivation behind this tax as being to replace lost Fuel Duty revenue, but he expresses concern about the implementation. He suggests that the government has opted for a "weird self-reporting system" backed by MOT checks, rather than a more efficient 'black box' system, raising concerns over an IT project failure. He even jokes that new rules will be needed to combat odometer fraud, potentially leading to car confiscation.

Mansion Tax = £0.4 billion:
Peston and Neidle both note the comparatively very small amount of revenue this new Council Tax levy on properties over £2 million is set to raise. Neidle views the small figure as a political move, giving the government "red meat" for its backbenchers, while acknowledging that it's a "messy compromise" to address the broken nature of Council Tax without undertaking the politically difficult step of revaluing all properties. He predicts disputes over property valuation near the £2 million threshold.

Freezing Personal Tax Thresholds = £8 billion:
Discussing the largest revenue raiser, Neidle analyses the Resolution Foundation's work, which compares the impact of the threshold freeze to a simple 1p rise in Income Tax. He explains that the freeze, which raises a large amount by pushing earners into higher tax brackets due to inflation (fiscal drag), is a continuation of a "strange conservative kind of progressive taxation" that primarily hits the upper-middle class, whereas a basic income tax rise would be more proportionally progressive, heavily affecting the very rich.

Key moments and topics discussed:
00:00: Introduction to Dan Neidle
00:48: Neidle's critique of the Budget lacking "serious reform."
00:50: Discussion of the "broken" UK tax system.
01:34: Analysis of the Mileage Charge on Electric Cars and implementation issues.
02:30: Neidle explains the planned self-reporting system for electric car mileage.
03:20: Discussion of the "Mansion Tax" and its low revenue yield.
04:39: Concerns about the potential for disputes over property valuation.
05:04: Analysis of the £8bn freeze to Personal Tax Thresholds.
05:20: Resolution Foundation analysis on the progressive nature of the threshold freeze vs. Income Tax rise.

Peston is ITV’s flagship political programme, bringing you analysis, debates, and interview exclusives on the latest in current affairs.

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