Paying for Covid
Discussion
Looks like Rishi Sunak has decided that someone needs to pick up the bill
The Sunday papers are reporting
Capital gains tax and corporation tax would both be raised in proposals reportedly set to play a central part of Rishi Sunak's Budget in November.
The Chancellor is specifically understood to be looking at hiking corporation tax from 19 per cent to 24 per cent to raise £12billion next year and £17billion in 2023/24.
Second-home owners would also be hit under proposals to require people to pay capital gains tax at the same rate as they pay income tax.
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.
Under the proposals, capital gains tax could be merged with income tax, while pension tax relief could be slashed.
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 revamp of the inheritance tax system and the introduction of an online sales tax was also being considered.
The Sunday papers are reporting
Capital gains tax and corporation tax would both be raised in proposals reportedly set to play a central part of Rishi Sunak's Budget in November.
The Chancellor is specifically understood to be looking at hiking corporation tax from 19 per cent to 24 per cent to raise £12billion next year and £17billion in 2023/24.
Second-home owners would also be hit under proposals to require people to pay capital gains tax at the same rate as they pay income tax.
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.
Under the proposals, capital gains tax could be merged with income tax, while pension tax relief could be slashed.
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 revamp of the inheritance tax system and the introduction of an online sales tax was also being considered.
'whatever it takes', eh Rishi??
If any of this is true, he's totally f
ked his chances of ever becoming PM. I seem to remember him hinting, along with the BoE governor, that the debt from all of this bks was going to be kicked into the future like a war loan.
If corporation tax goes up, where does that leave our competitive edge after Brexit?????
CBA voting ever again if this really is where we're headed - there seems little point.....
If any of this is true, he's totally f
ked his chances of ever becoming PM. I seem to remember him hinting, along with the BoE governor, that the debt from all of this bks was going to be kicked into the future like a war loan.If corporation tax goes up, where does that leave our competitive edge after Brexit?????
CBA voting ever again if this really is where we're headed - there seems little point.....
I can’t see all of this happening. Its accepted that you can’t tax yourself to prosperity and you stimulate the economy with tax cuts. Especially corporation taxes post Brexit, we should be cutting those.
Some of these would be more politically palatable and more likely such as capital gains and pension tax relief, but they are going after their core voters there.
Online sales tax needs to happen but is a political hot potato when we need a trade deal with the US.
I’m sure some will happen, but it’s the usual obvious kite flying to see which ones create the most noise, and so whatever they do introduce doesn’t feel as bad as expected.
Some of these would be more politically palatable and more likely such as capital gains and pension tax relief, but they are going after their core voters there.
Online sales tax needs to happen but is a political hot potato when we need a trade deal with the US.
I’m sure some will happen, but it’s the usual obvious kite flying to see which ones create the most noise, and so whatever they do introduce doesn’t feel as bad as expected.
Edited by dmahon on Sunday 30th August 06:16
The thread title should more accurately be termed "paying for lockdown" as most of the economic damage was self inflicted.
In terms of measures to pay for it I would doubt they have been decided yet. Potential measures are likely leaked to attract a media furore so they can be shot down.
Given the number of small limited companies there is a strong case for the rate of CT to be the same as the basic rate of income tax, I.E. 20%, so that might happen.
Also HM R&C have been looking at pensions tax relief for a long time. Restricting the relief to the basic rate of income tax would be thought by many to be a fairer system.
Need to see the concrete proposals before judging but I think it is fair to say that over the past few months a narrative has developed that government money is free. Well it is not and at some point, whether it be now, next year or a couple of decades away, it has to be paid for.
In terms of measures to pay for it I would doubt they have been decided yet. Potential measures are likely leaked to attract a media furore so they can be shot down.
Given the number of small limited companies there is a strong case for the rate of CT to be the same as the basic rate of income tax, I.E. 20%, so that might happen.
Also HM R&C have been looking at pensions tax relief for a long time. Restricting the relief to the basic rate of income tax would be thought by many to be a fairer system.
Need to see the concrete proposals before judging but I think it is fair to say that over the past few months a narrative has developed that government money is free. Well it is not and at some point, whether it be now, next year or a couple of decades away, it has to be paid for.
Raising corporation tax to 24% as I see in some plans? Well what a nice way to reward those small company directors who've had very little in the way of personal support throughout this whole thing, despite many nearly losing their businesses after the government forced them to close.
Andy20vt said:
Raising corporation tax to 24% as I see in some plans? Well what a nice way to reward those small company directors who've had very little in the way of personal support throughout this whole thing, despite many nearly losing their businesses after the government forced them to close.
I worked throughout the stupid lockdown - just about made it through in one piece, & now this. I hope it's only sounding out on Rishi's part.....Not sure that cutting pensions relief is 'fairer'.
Successive govts have been busy 'pulling up the ladder' on those aspiring to social mobility to the middle classes for some time.
Cutting the ability of individuals to save for their retirement will simply mean more reliance on the state later in life - the opposite of what the drive for minimum workplace pension contributions has been aiming for.
Successive govts have been busy 'pulling up the ladder' on those aspiring to social mobility to the middle classes for some time.
Cutting the ability of individuals to save for their retirement will simply mean more reliance on the state later in life - the opposite of what the drive for minimum workplace pension contributions has been aiming for.
JagLover said:
Also HM R&C have been looking at pensions tax relief for a long time. Restricting the relief to the basic rate of income tax would be thought by many to be a fairer system.
So a high rate taxpayer would be taxed on money going into a pension, and taxed when taking it out? What's the incentive to save into a pension if it's subject to tax twice and is tied up for decades.
Douglas Quaid said:
So they give no help to small limited companies whatsoever then want money from them. Why not just take the tax back from people who were furloughed rather than punishing small businesses again?
Ir35 showed they did not give a dam about small business. A model set up specifically so that end clients could not be certain they faced no risk so refused to engage and created no rights employees.This is terms of tax seems to be the least tory government in years
https://www.google.co.uk/amp/s/www.bbc.co.uk/news/...
These issues were already underlying - COVID is a reminder of why it is bad to run government at a deficit in ‘normal’ times.
We all are used to a level of public service comparable to our European social democratic neighbours, but taxes collected are closer to that of the USA.
We've already cut most things to the bone - now we either raise more taxes, QE or reduce services. simple as
This has needed to happen for a while but voters haven’t let it so governments haven’t done it.
These issues were already underlying - COVID is a reminder of why it is bad to run government at a deficit in ‘normal’ times.
We all are used to a level of public service comparable to our European social democratic neighbours, but taxes collected are closer to that of the USA.
We've already cut most things to the bone - now we either raise more taxes, QE or reduce services. simple as
This has needed to happen for a while but voters haven’t let it so governments haven’t done it.
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