Europe

Rishi refuses to rule out tax increase 'to plug £43,000,000,000 black hole'

Rishi Sunak has been tight-lipped about reports he plans to have 1.6 million people pay a higher rate of tax by the next general election.

The increases would raise around £6 billion as part of a ‘pathway’ to finding an extra £43 billion a year, which is necessarily due to the bill for paying for the coronavirus response.

He is expected to reveal the rises in the Budget on Wednesday, the Sunday Times reported.

The paper said the Chancellor will freeze for at least three years the threshold at which people start paying the income tax basic rate (£12,500) and the point when people start paying the higher 40p rate of tax (£50,000).

In their manifesto, the Tories pledged not to raise the headline rates of income tax, VAT and national insurance.

If it goes ahead, this reported plan will not breach the pledge but some MPs are likely to see it as a breach in spirit.

The Times also claimed that Mr Sunak will outline a plan to raise corporation tax from 19p in the pound to 25p by the end of the parliament.

Interviewed on Sky’s Sophy Ridge on Sunday this morning, Mr Sunak did not deny that he plans to increase taxes soon before slashing them in a pre-election Budget.

Asked if he told Tory MPs in private that he would seek to raise tax now and then cut them before the election, he said: ‘I would like to be able to keep taxes low for people in general, I’m a Conservative and I believe in that.

‘But I want to deliver our promises that we made to the British people that we would be responsible with their money, that we would look after the nation’s finances and we would deliver strong public services.

‘I think in the short-term what we need to do is protect the economy and keep supporting the economy through the road map and over time what we need to do is make sure our public finances are sustainable.

‘That isn’t going to happen overnight, that’s going to be work that takes time given the scale of the shock that we’ve experienced but if you’re asking do I want to deliver low taxes for people, of course I do.’

Mr Sunak said he cannot talk about tax outside the Budget and declined to say whether he would stick by the manifesto pledge not to raise the rate of income tax, VAT or National Insurance.

Get in touch with our news team by emailing us at [email protected]

For more stories like this, check our news page.

Source: Read Full Article