September 2nd, 2020.

Rishi Sunak is eyeing raising corporation tax from 19 per cent to 24 per cent to help pay down Britain’s COVID-19 debt. Such a move would raise £12bn next year, rising to £17bn in 2023-24, according to The Sunday Times.

Sunak will argue that 24 per cent is the global average tax rate for business and would still be lower than other European economies such as France, Germany, Italy and Spain.

The corporation tax hike would be part of a £30bn tax squeeze on businesses, pensions and foreign aid, to help pay off the estimated £391bn the government will spend trying to stave off the economic consequences of Covid in 2020-21 alone.

Increase dividend tax
Meanwhile, the Treasury is also looking at increasing the tax rate for company directors who pay themselves in dividends – currently 7.5 per cent compared to a basic income tax rate of 20 per cent. Such a move would especially hurt sole traders and others who have already missed out on government COVID-19 financial support.

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