Tax Justice UK has called on the government to think hard about who pays for the UK’s pandemic response as the economy starts to re-open.
In its briefing for the Queen’s Speech, Number 10 said that the largest, most profitable businesses will have to pay more tax – but that “people will have to contribute a little more too”.
Tax Justice UK executive director, Robert Palmer, said: “Any tax rises should fall on those with the broadest shoulders and are most able to pay.
“Covid has had a radically different effect on family finances with well off households saving and the poorest more likely to go into debt.
“Business has also received unprecedented government support, so it’s only right that profitable companies should pay more in tax.”
Earlier this month chancellor Rishi Sunak hinted that wealthy families could escape a post-pandemic tax raid earmarked to boost the economy.
Speaking at The Wall Street Journal’s CEO Council Summit last night, he signalled he was preparing to water down a proposed hike to capital gains tax, suggesting that measures announced in the March Budget would be enough to restore public finances.
“As we look forward to reopening over the coming weeks and months, there are signs to be cautiously optimistic and we can see that in the data. I’m hopeful that will be sustained through the rest of the year,” he said.
“We are seeing consumer confidence back to pre-pandemic levels. Chief finance officers are very positive. We know that there is an enormous amount of excess savings both in the household sector, approaching £140bn, and £100bn sitting on corporate balance sheets.”
Asked whether the richest families in the UK should brace themselves for higher tax hits, Sunak said: “The top one per cent, for example, of income earners pay or account for almost 30 per cent of all income tax receipts as it is, so I think we start with a very progressive tax system.
“We can get debt on a stable to declining basis broadly with the measures that we’ve already announced.”
Related: Windfall tax on megacorps like Amazon ‘most popular way to cover the £2.8bn cost of lockdown’