The Chancellor has not yet revealed what tax policies he intends to change in order to help the economy recover from the coronavirus pandemic. Last week he refused to reveal any information on incoming changes, and didn’t rule out tax hikes to raise funds for the Government. Mr Sunak said current levels of spending were “unsustainable” but, when asked if the tax lock still applied, he added: “I’m not going to be drawn on future fiscal policy.” Income tax, VAT and national insurance could all be in his sights as many in Britain await how the pandemic will impact their pockets.
The Chancellor commissioned a Government review which looked at ways he could try to raise funds to help the country’s economy recover.
The Government review carried out by the Office of Tax Simplification laid out potential changes to capital gains tax which could also impact inheritance tax bills for many in the UK.
Mr Sunak has not yet confirmed whether he will accept the recommendations of the report, but experts are already warning that increased deductions could cause many to lose out.
Graham Boar, partner at accountancy group UHY Hacker Young, said earlier this month that the proposals are “designed to increase tax revenue and add complexity rather than simplify CGT”.
He added: “They would also create some huge winners and losers.”
Lesley Davis, from the law firm Shakespeare Martineau, echoed these warnings.
She said: “No matter which of these elements of inheritance tax are targeted, many individuals and families will be hugely affected. An increase in capital gains tax could mean a large reduction in profit on the sale or transfer of capital assets.”
However, many experts have warned that tax increases won’t help the UK economy recover.
Richard Murphy of Tax Research UK told Express.co.uk earlier this year that tax hikes could lead to a “depression”.
He also hit out at Mr Sunak’s overall handling of the crisis.
Mr Murphy said: “At first, Rishi Sunak completely underestimated what was going to happen, it was a complete disaster, because he hadn’t realised how disastrous coronavirus was going to be.
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He said: “At the moment, the Government is still able to borrow money at historically low interest rates, and there is no sense this will change in the foreseeable future.
“The fact that debt has risen well above 100 percent of GDP, from 40 percent before the financial crisis, does not, of itself, make much difference, provided the Government can still borrow money at low interest rates on financial markets.
