Tory MPs are nervous about any increase in corporation tax because increasing it to 24% would seem to be in bed with Labour’s tax policy. The Institute for Fiscal Studies has calculated, while a 2% online sales tax would bring in 2bn and a 1% increase in fuel duty 295m. The lockdown has reduced the size of the economy by 20.4 per cent between April and June.Īccording to the Treasury’s own estimates, to increase corporation tax to 24% would raise 17bn per year, while capital gains tax increases would generate another 1.05bn.Īnother target is cutting pension tax relief to 20% would raise 11bn. Tory MPs and businesses have reacted with shock to the potential corporation tax hikes as firms struggle with various challenges. The Office for Budget Responsibility’s (OBR) scenario warns of a record 322bn in borrowing this year, and a considerable deficit that still endures at 116bn or 4.6 per cent of GDP in 2024-25. Mr Stephen Barclay, the chief secretary to the Treasury, over the weekend refused to comment on speculation that pension tax-relief could be cut, capital gains tax increased and corporation tax hike from 19% to 24%.
Speculation, the UK Treasury, could raise 20bn through extra taxes to deal with the fallout from Covid-19. The Sunday Times has reported the chancellor is set to increase taxes to raise revenue.
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