Tax rises predicted

Posted on 13 Jan 2014
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Treasury officials call for tax hikes The Sunday Telegraph’s Harry Yorke reports that Treasury officials are pushing for tax rises to help boost public finances hit by the coronavirus crisis, with Downing Street said to be resisting moves that could see the Exchequer pull in an extra £20bn a year. Sources tell the paper that proposals under consideration include aligning capital gains tax with income tax and cutting pension tax relief, with the introduction of an online sales tax and simplification of the inheritance tax system also mooted. Mr Yorke says that while Downing Street may not be opposed to some tax rises, especially the closing of perceived loopholes for the wealthiest in regard to capital gains and pensions, those around the Prime Minister fear a major tax raid risks derailing the economic recovery. He adds that senior Downing Street figures would rather reduce spending, with senior economists and business leaders also against increasing taxes, saying Chancellor Rishi Sunak’s focus should be on stimulating growth. Paul Johnson, director of the Institute for Fiscal Studies, says tax rises will be needed “eventually” but it is unlikely they will be rolled out soon due to uncertainty over the state of the economy. Elsewhere, the Sunday Times reports that Mr Sunak is planning a “£30bn tax raid” in November’s Budget, saying increases in capital gains tax and corporation tax are on the cards, with the latter possibly jumping from 19% to 24%.

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