A leaked bombshell report reveals that the UK Treasury is pushing for dramatic tax rises in order to pay for the UK’s coronavirus lockdown.
A quintuple of tax hikes of up to €22.4bn (£20bn) are at present being considered by the Treasury to deal with the cost of the coronavirus crisis. In particular, Ministers are looking at raising capital gains tax levels and corporation tax in the coming November Budget.
Foreign aid, pensions, businesses, and the wealthy- Chancellor Rishi Sunak is considering hiking corporation tax from 19 per cent to 24 per cent in order to boost revenue by €13.44bn (£12bn) next year, the report indicated. Another proposal being considered is that Capital gains tax could be paid at the same rate as income tax.
Fuel and other duties could be raised and online sales tax could also be introduced to help plug any gaping holes in the economy.
A ‘much needed’ revamp of the inheritance tax system, including the introduction of an online sales tax, was also being looked at by ministers. The international development budget, always hotly contested, could also be caught up in Treasury reappraisals due to the cost of the pandemic, it was claimed.
The aid budget has already been cut by €3.2bn (£2.9bn) from €17.6bn (£15.8bn) this year, due to the contraction in the economy caused by the Covid-19 outbreak. Chancellor Rishi Sunak has been asked not to raise taxes during the worst recession the UK has seen for 300 years but instead focus on aiding growth.
Government insiders familiar with the proposals say the moves are likely to spark a furious reaction from businesses who are still reeling from the impact of the pandemic and from Tory MPs in the party’s heartlands who are worried about losing voters.
Under the scheme, Second-home owners would also be hit hard as they would be required to pay capital gains tax at the same rate as they pay income tax at present. That would involve people who own second homes and buy-to-let properties paying capital gains tax at 40 per cent or 45 per cent as opposed to the current 28 per cent when they sell the properties.
It is thought that Boris Johnson backs some of the proposed tax rises but is also looking at public spending cuts.