Chancellor Rishi Sunak is reportedly looking to raise corporation tax in the upcoming March budget to pay off the estimated £400bn borrowed by the UK throughout the pandemic.
According to The Financial Times, the alleged move has sparked uproar among business owners who claim they are still struggling with the economic impact of Covid-19.
However, it is believed the Sunak sees the decision as a “matter of fairness”, with the chancellor holding the view that companies have benefited from millions of taxpayer support throughout the ongoing crisis.
Sunak, who was the brains behind business rates relief and other Covid aid, has reportedly told Treasury officials that a rise in corporation tax would still allow Britain to hold a competitive position with other G7 countries. Currently corporation tax is set at 19%.
Ahead of the spring budget the ICAEW has called for the government to “focus on delivering existing plans and Covid support packages”.
The ICAEW said: “In the light of the continuing pandemic and leaving the EU, the theme of the budget needs to be ‘steady as she goes’ with any changes kept to a minimum.”
“We therefore recommend implementing only existing pre-announced changes, with the exception of coronavirus related relaxations, simplifications to reduce Making Tax Digital reporting burdens for businesses and property landlords from April 2023, and measures to facilitate cross-border trade.”