5 tax increases that could pay the coronavirus according to a leaked document

0
83


Britain faces long and difficult years to repay the cost of the coronavirus pandemic.

And now a leaked Treasury document has listed some of the sinister options for paying off a deficit that he says could reach £ 337 billion this year.

According to the Telegraph, officials discussed the public sector wage freeze for two more years – and the end of the “triple lock” which guarantees an exceptional increase in pensions.

Transportation Secretary Grant Shapps said today he does not recognize “speculative” figures, but the UK would not return to a “world of austerity”.

The Treasury declined to comment on the report, but it is understood that the document is one of many put together by different teams to discuss ideas for future policy.

A source said the document “does not reflect government policy”.

However, in a general sense, everyone recognizes that this pandemic has an enormous cost.

Traditionally, there are only a few ways to raise funds – loans, austerity, and tax hikes.

So without austerity, what kind of tax hike could we possibly consider? Here are five that are discussed in the document, according to the Telegraph.

1. Income tax




Income tax – ranging from 20% on most earnings to 45% on highest earnings – is one of three taxes protected by a triple “tax lock” by Boris Johnson.

In the 2019 Conservative manifesto, the Prime Minister promised not to increase income tax, VAT or national insurance for the duration of Parliament – potentially until 2024.

But according to the Telegraph, Treasury officials have warned that it would be “very difficult” to hold the lock now, so much money has been spent on Covid-19.

The document states that it is “economically better to break the tax lock to obtain income of this magnitude than to try to increase this level of income with this constraint”.

An extra penny of income tax for every pound earned could bring in £ 5 billion a year.

2. VAT



Senior woman putting money into piggy bank

VAT was also protected until 2024 by the Conservatives’ triple tax lock-in, but it may have to increase.

This would be bad news for the poorest people in Britain, who spend most of their income on essential goods and services that bear VAT.

It is 20% on most goods and was raised to this rate against 17.5% in 2011.

Treasury officials say a hike could “increase tax-advantaged amounts,” according to Telegrah.

3. National insurance




This seems the most likely increase – as already mentioned by Chancellor Rishi Sunak.

NI comes in many forms, but the target of any change could be the self-employed.

Self-employed workers with profits of up to £ 50,000 a year pay national insurance at the rate of 9% of profits. Most employees earning up to £ 50,000 a year pay 12%.

Mr. Sunak said in March, “I have to be honest and point out … it is now much more difficult to justify the inconsistent contributions between people of different employment statuses.

“If we all want to receive equal state support, we must all pay equally in the future. “

Read more

Boris Johnson’s plan to ease foreclosure

4. An NHS supplement

According to the Telegraph, officials have raised the idea of ​​a “surcharge” for using the NHS or social assistance.

The document’s report does not specify how detailed this plan would be or which services might incur additional charges.

The Lib Dems have already offered an additional penny on income tax, dedicated to health services.

5. New green taxes

According to the Telegraph, new “green taxes” are being discussed by Treasury officials.

Again, the form they would take is unclear.

LEAVE A REPLY

Please enter your comment!
Please enter your name here