UK business group ‘concerned’ over potential corporate tax hike | public finance
A business group has said it is “very concerned” at reports that corporation tax could be raised to help balance public finances amid the coronavirus pandemic, after a Treasury minister said refused to rule out such a decision.
Steve Barclay, the chief treasury secretary, said he could not comment on possible tax measures until the planned autumn budget, which would be the second of 2020.
“Treasury ministers don’t try to get into what a budget will or won’t do, and especially tax measures,” Barclay told Times Radio. “It’s for the chancellor, for the budget.”
In what appeared to be an unofficial spread of possible Treasury plans for the fall, two pro-government newspapers reported on Sunday that Chancellor Rishi Sunak and his officials were considering tax hikes to help recoup the funds audiences exhausted by the crisis caused by Covid -19.
The Sunday Telegraph said capital gains tax could be raised to bring it into line with income tax, as well as possible changes to income tax relief. pensions and inheritance rights.
According to a Sunday Times report, another measure could be to raise corporation tax from its current level of 19%, one of the lowest levels among major economies, at 24%.
Adam Marshall, the chief executive of the UK Chambers of Commerce, said a rise in corporation tax could hamper any post-coronavirus recovery and would particularly affect small businesses, which lacked the “attractive tax provisions”. many large multinationals.
“I’m very concerned about what I’m reading in the papers this morning,” Marshall told Times Radio. “I really hope it’s the treasury kites, rather than settling politics.
“We don’t want to choose between a strong recovery, with a lot of investment and risk-taking by entrepreneurs, or a short-term recovery in public finances. We need to give the recovery space to build and grow. If the Treasury immediately reverts to orthodoxy, it will be a truly damaging mistake.
If companies are told that tax rates are going up, “you tell them it’s not a good environment to invest in, not a good environment to take risk on, you’ll hinder the recovery,” Marshall said. “Let’s feed the embers of this recovery first, then fix public finances – don’t take it the wrong way.
Also speaking to Times Radio, Barclay confirmed the government’s commitment to maintaining spending levels, particularly on infrastructure projects, but declined to say how this would be funded.
“There are always four moving parts to this,” he said. “The key objective within the Treasury is to get growth – how do we drive productivity, how do we get growth? Then there’s a balance between the other three moving parts of debt, spending , contributing expenses and taxes.
“And what is your trade-off then between your spending measures and your tax measures? The real aim is to reduce the economic scars of Covid.