Rishi Sunak will announce much-anticipated plans to increase corporation tax in the Budget next month, in a bid to repair the UK’s pandemic-hit economy.
The Chancellor is not expected to immediately rise the tax on March 3, but instead increase it by 1 percentage point in the autumn, taking it to 23pc over the parliament, reported The Times.
Each percentage point rise would raise around £3bn, it said, according to HMRC modelling. At the same time, however, previous estimates by the Office for Budget Responsibility have suggested every percentage point rise could knock 0.5pc off business investment spending.
Mr Sunak’s plans would reverse some of the cuts made under former Chancellor George Osborne, which have led corporation tax to fall from 28pc to 19pc. The UK currently has the lowest corporation tax in the G7.
It comes after much speculation he would force firms to pay more as a way to raise revenue, as economists warn Britain is on course to borrow a record £450bn this year.
Louise Moon has the full story.