UK
Workers earning above £19,500 ($33,651.15 Canadian Dollar)
'face higher taxes' to help cover coronavirus bill
MAKE THE RICH PAY! NOT THE WORKERS!
It comes as latest figures show the Treasury borrowed £208billion in the first six months of the current financial year - up £175billion on the same period in 2019
By Emma Munbodh Deputy Money Editor
12:37, 12 NOV 2020
UPDATED13:10, 12 NOV 2020
MONEY
Workers earning more than £19,500 ($33,651.15 Canadian Dollar) a year face huge tax rises to help rebuild the Covid-19 hit economy, a think tank has warned.
The Resolution Foundation said a £40billion tax hike could be enforced in the coming years to help tackle the Treasury's growing debt mountain.
It comes as latest figures show the government borrowed £208billion in the first six months of the current financial year - up £175billion on the same period in 2019.
The think-tank recommended a 'health and social care levy' - a 4% tax on all incomes over £12,500 ($21,573.75 Canadian Dollar) - which would be offset by a 3% cut to employee national insurance and the abolition of Class 2 National Insurance contributions for the self-employed.
It said the shift - which would raise £17billion a year - would not penalise those worst-hit by the virus, such as the lowest paid households and self-employed.
"These offsets would leave employees earning £19,500 ($33,651.15 Canadian Dollar) and below better off, as well as self-employed workers earning less than
This could include online retailers whose profits have rocketed this year as well as supermarkets who have seen sales surge in the wake of panic-buying.
Meanwhile, an increase in corporation tax from 19% to 22% would raise £10billion, the foundation said.
It also put forward wealth rises of £9billion, including restrictions on capital gains and inheritance tax reliefs, and another increase in council tax on homes worth more than £2million.
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John Lewis to axe 1,500 more jobs as Covid-19 pandemic wipes £635million off sales
It comes after a report commissioned by Rishi Sunak suggested that capital gains tax should be doubled to help fix the economy.
The Office for Tax Simplification (OTS) said the tax, levied at 10% for basic-rate taxpayers and 20% for higher-rate taxpayers, could be doubled if it were brought in line with income tax.
Capital gains tax is the levy you pay on the profits - or gain - that you make when you sell, give away or dispose of something you own, such as property.
At the moment, the first £12,300 of capital gains is exempt.
However, the report added that these exemptions should be scrapped.
It said the measures could raise up to £14billion annually.
Resolution Foundation research director James Smith said: The chancellor should combine tried and tested revenue raisers with major reform of wealth taxation and a new health and social care levy.
"This would ensure that post-Covid tax rises reflect the very uneven nature of this crisis, but also play a part in building a better country after it."
12:37, 12 NOV 2020
UPDATED13:10, 12 NOV 2020
MONEY
The Resolution Foundation said a £40billion tax hike in the coming years could help tackle the UK's rising debt mountain (Image: Getty Images)
Workers earning more than £19,500 ($33,651.15 Canadian Dollar) a year face huge tax rises to help rebuild the Covid-19 hit economy, a think tank has warned.
The Resolution Foundation said a £40billion tax hike could be enforced in the coming years to help tackle the Treasury's growing debt mountain.
It comes as latest figures show the government borrowed £208billion in the first six months of the current financial year - up £175billion on the same period in 2019.
The think-tank recommended a 'health and social care levy' - a 4% tax on all incomes over £12,500 ($21,573.75 Canadian Dollar) - which would be offset by a 3% cut to employee national insurance and the abolition of Class 2 National Insurance contributions for the self-employed.
It said the shift - which would raise £17billion a year - would not penalise those worst-hit by the virus, such as the lowest paid households and self-employed.
"These offsets would leave employees earning £19,500 ($33,651.15 Canadian Dollar) and below better off, as well as self-employed workers earning less than
£17,000 ($29,343.70 Canadian Dollar) " the study said.
People working from home 'should pay 5% more tax' to give jobless £2,000 grants
Other measures include a "pandemic profit levy" on firms that have benefited from the crisis.
Other measures include a "pandemic profit levy" on firms that have benefited from the crisis.
This could include online retailers whose profits have rocketed this year as well as supermarkets who have seen sales surge in the wake of panic-buying.
Meanwhile, an increase in corporation tax from 19% to 22% would raise £10billion, the foundation said.
It also put forward wealth rises of £9billion, including restrictions on capital gains and inheritance tax reliefs, and another increase in council tax on homes worth more than £2million.
The tax rises will be in force by the 'middle of the decade' it said
(Image: Getty Images)
READ MORE
John Lewis to axe 1,500 more jobs as Covid-19 pandemic wipes £635million off sales
It comes after a report commissioned by Rishi Sunak suggested that capital gains tax should be doubled to help fix the economy.
The Office for Tax Simplification (OTS) said the tax, levied at 10% for basic-rate taxpayers and 20% for higher-rate taxpayers, could be doubled if it were brought in line with income tax.
Capital gains tax is the levy you pay on the profits - or gain - that you make when you sell, give away or dispose of something you own, such as property.
At the moment, the first £12,300 of capital gains is exempt.
However, the report added that these exemptions should be scrapped.
It said the measures could raise up to £14billion annually.
Resolution Foundation research director James Smith said: The chancellor should combine tried and tested revenue raisers with major reform of wealth taxation and a new health and social care levy.
"This would ensure that post-Covid tax rises reflect the very uneven nature of this crisis, but also play a part in building a better country after it."
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