Rishi Sunak to raise income tax, corporation tax and place levy on online deliveries after Covid
Rishi’s tax rises: Chancellor to raise income tax, corporation tax, place levy on online deliveries and could target self-employed as he says Covid has had ‘enormous toll’ on public finances
- Chancellor wants to ‘level up playing field’ between online and high street firms
- He is also looking to freeze the UK’s minimum income tax threshold of £12,500
- At the same time, he will look to freeze 40 per cent tax threshold of £50,000
- Double move could raise up to £6billion in tax by 2025, reports Sunday Times
- Rishi Sunak is also considering a tax on online deliveries, say Sunday Telegraph
Rishi Sunak could launch a tax raid on online businesses – including a green tax on deliveries – as part of plans to replenish the country’s coffers in the wake of the Covid pandemic.
The Chancellor of the Exchequer is reportedly looking to ‘level up the playing field’ between online and high street businesses as part of a series of tax rises set to be announced next month.
A green deliveries levy on online retailers is one route Mr Sunak could take, according to the Sunday Telegraph.
The Chancellor has reportedly cooled his interest in a Covid ‘windfall tax’ on the ‘excessive’ profits website-based businesses have raked in during the pandemic.
He is also reportedly eyeing tax increases for the self-employed, along with raising an extra £6billion from income tax by 2025 with some clever threshold tactics.
Mr Sunak could freeze the lowest threshold for tax payers at £12,500 for the next three years – leading to small tax rises for those on lower incomes, reports the Sunday Times.
At the same time, the Chancellor could keep the £50,000 tax threshold – at which people being to pay 40 per cent on their income.
Such a move, which maintains the Conservative’s election pledge not to raise headline rates of income tax, would thrust more than 1.6million people into the higher tax bracket by the 2024 General Election.
Corporation tax could also rise as the Chancellor looks to chip at least £43billion away from the £300billion cost of the pandemic.
But amid a series of tax rises will also be a bumper stimulus package, as Mr Sunak looks to jump-start the UK’s economy after lockdown.
He is set to unveil £5billion in cash grants for businesses suffering from repeated lockdowns when he presents his March budget on Wednesday.
Rishi Sunak (pictured) could launch a tax raid on online businesses – including a green tax on deliveries – as part of plans to replenish the country’s coffers in the wake of the Covid crisis
The Chancellor is reportedly looking to ‘level up the playing field’ between online and high street businesses – the latter of which have been hugely hit by three national lockdowns – after unveiling his budget next month
A green deliveries levy on online retailers (pictured: Such as Amazon) is one route Mr Sunak could take, according to the Sunday Telegraph
After the bounce-back budget, the Chancellor is set to reveal his tax plans on March 23 – dubbed ‘tax day’ – according to the Sunday Telegraph.
But the plans will not include a windfall tax on companies which have seen huge profit spikes in the pandemic.
Earlier this month it was reported that treasury officials were weighing up plans for an online sales tax in a bid to re-balance the scales between booming online businesses and struggling high street firms.
Such a levy, dubbed the ‘Amazon Tax’, is aimed at targeting major online retailers who posted huge profits while avoiding pricey high street rent costs and overheads – giving them a big advantage over traditional retailers.
But the Chancellor is set to have turned his back on the idea and is instead looking at taxing online businesses based on deliveries.
He is also set to have pushed back on any fuel duty rises.
However, he could instead launch a tax raid on businesses, with corporation tax likely to rise from 19p in the pound to 25p by the next election.
Mr Sunak could also target the self-employed in the autumn, according to reports, with an increase in National Insurance contributions said to be on the horizon for more than 4.5million workers.
The tax hikes will be part of the Chancellor’s aim to fill the £40billion deficit in the budget.
The figure is the amount the influential Institute for Fiscal Studies believes the Chancellor needs to find in order to get Britain back on a safe financial path in the wake of the pandemic.
The UK has added more than £300billion to the national debt during the pandemic helping keep businesses afloat and putting workers on furlough.
It has pushed the total to more than £2.13 trillion – almost 100 per cent of the country’s gross domestic product (GDP).
But according to the Sunday Times, Mr Sunak will offer a series of cash boosts to help the economy bounce back after lockdown.
These include £22billion to a national infrastructure bank to help fund national projects, another £15billion to support the furlough scheme through to June, and mortgages of 95 per cent on purchases up to £600,000 for first time buyers and homeowners looking to move.
A new sovereign green savings bond – the first of its kind in the world – could also help bring billions of pounds of investment in green energy, the paper adds.
Meanwhile, pubs and high street shops will be thrown a lifeline in Mr Sunak’s Budget as he promised to ‘get the tills ringing once again’.
On Wednesday the Chancellor will unveil £5billion in cash grants for businesses suffering from repeated lockdowns.
He will announce the new ‘Restart Grants’ to help businesses reopen once restrictions are finally eased.
The grants will be on top of £20billion in direct cash grants already handed out during the pandemic.
Last night Mr Sunak told The Mail on Sunday: ‘It’s been an incredibly difficult year for our high streets. But soon shops, pubs, cafes and restaurants will be able to open their doors once again, and we’re providing the support they need to get them through, get them back on their feet and get the tills ringing once again.’
Hospitality, hotels, gyms, hair and beauty salons will be eligible for up to £18,000 per premises, allocated based on the rateable value of their property.
The Treasury has estimated 230,000 firms will be eligible for the higher band, which will be awarded based on their rateable value, and 450,000 shops will also be able to apply. Local councils will distribute the grants and will receive the funding in April.
Rishi Sunak is under pressure from landlords to bulk up financial support for pubs in next week’s Budget
Hospitality is among the sectors to have borne the brunt of successive lockdowns and has spent the past year either grappling with Covid restrictions or shut entirely. Pictured: Boarded up Coach & Horses pub in Central London
The £5billion pot will apply to businesses in England while those in Scotland, Wales and Northern Ireland will receive an extra £794 million in funding through the Barnett formula.
The Chancellor said: ‘Our local businesses have been hit hard by the pandemic which is why we went big and went early with a multibillion-pound package of support. There’s now light at the end of the tunnel and this £5 billion will ensure our high streets can open their doors with optimism.’
Kate Nicholls, chief executive of industry group UK Hospitality, said the grants were ‘great news for hospitality businesses that have been struggling to see how they could survive through to the Prime Minister’s reopening dates.
‘Cash reserves have been severely depleted after a year of closure and restrictions and these grants are a very welcome boost, putting the sector in a better place to restart.’
Last week Tory MPs urged cuts to beer duty to help pubs reopen after restrictions are eased.
A letter signed by 68 backbenchers called for a ‘significant’ cut to the tax.
The Budget is also expected to include an announcement to raise corporation tax as Mr Sunak lays down markers that he will need to start balancing the books.
The Chancellor faces pressure from backbenchers over tax rises, with Tory MPs being warned they could be kicked out of the party if they vote against the Budget.
This weekend the Chancellor issued a warning about the scale of economic damage caused by the pandemic and the need to repair public finances.
In an interview with the Financial Times, Mr Sunak said he wants to ‘level with people’ about the challenge facing him, adding that the UK is ‘exposed’ to changes in record-low interest rates, with a rise of 1 percentage points worth £25 billion a year to the Government’s cost of servicing its debt.
Chancellor Rishi Sunak makes £5billion pledge to pubs and high street shops to ‘get the tills ringing once again’
Pubs and high street shops will be thrown a lifeline in Rishi Sunak‘s Budget as he promised to ‘get the tills ringing once again’.
On Wednesday the Chancellor will unveil £5 billion in cash grants for businesses suffering from repeated lockdowns.
He will announce the new ‘Restart Grants’ to help businesses reopen once restrictions are finally eased.
The grants will be on top of £20 billion in direct cash grants already handed out during the pandemic.
Rishi Sunak is poised to announce £5billion for the struggling high street in next week’s budget (pictured preparing for the big announcement)
Mr Sunak promised continuing support for struggling businesses as the economy reopens
Last night Mr Sunak told The Mail on Sunday: ‘It’s been an incredibly difficult year for our high streets. But soon shops, pubs, cafes and restaurants will be able to open their doors once again, and we’re providing the support they need to get them through, get them back on their feet and get the tills ringing once again.’
Hospitality, hotels, gyms, hair and beauty salons will be eligible for up to £18,000 per premises, allocated based on the rateable value of the property.
The Treasury has estimated 230,000 firms will be eligible for the higher band, which will be awarded based on their rateable value, and 450,000 shops will also be able to apply. Local councils will distribute the grants and will receive the funding in April.
The £5 billion pot will apply to businesses in England while those in Scotland, Wales and Northern Ireland will receive an extra £794 million in funding through the Barnett formula.
The Chancellor said: ‘Our local businesses have been hit hard by the pandemic which is why we went big and went early with a multibillion-pound package of support. There’s now light at the end of the tunnel and this £5 billion will ensure our high streets can open their doors with optimism.’
The £5billion will come in addition to £20billion already handed out to businesses so far during the pandemic, Mr Sunak said
Kate Nicholls, chief executive of industry group UK Hospitality, said the grants were ‘great news for hospitality businesses that have been struggling to see how they could survive through to the Prime Minister’s reopening dates’.
‘Cash reserves have been severely depleted after a year of closure and restrictions and these grants are a very welcome boost, putting the sector in a better place to restart,’ she added.
Last week Tory MPs urged cuts to beer duty to help pubs reopen after restrictions are eased. A letter signed by 68 backbenchers called for a ‘significant’ cut to the tax.
The Budget is also expected to include an announcement to raise corporation tax as Mr Sunak lays down markers that he will need to start balancing the books.
The Chancellor faces pressure from backbenchers over tax rises, with Tory MPs being warned they could be kicked out of the party if they vote against the Budget.
This weekend the Chancellor issued a warning about the scale of economic damage caused by the pandemic and the need to repair public finances.
In an interview with the Financial Times, Mr Sunak said he wants to ‘level with people’ about the challenge facing him, adding that the UK is ‘exposed’ to changes in record-low interest rates, with a rise of 1 percentage points worth £25 billion a year to the Government’s cost of servicing its debt.
