Sunak considers raising corporation tax

The Confederation of British Industry, or CBI, is urging Britain's Chancellor of the Exchequer Rishi Sunak not to increase corporation tax in his Budget in March, and has called for immediate financial help to see the economy through the current lockdown and an extension to the furlough and business loans programs.

Sunak is exploring ways to pay off some of the United Kingdom government's spending bill that has mounted from tackling the economic effects of the novel coronavirus pandemic.

At the same time, the chancellor is also under pressure to reduce taxes to promote the government's so-called leveling up agenda, which seeks to rebalance the economy between London and the rest of the UK.

The Times reported that officials are considering a "long-term plan to replace both council tax and stamp duty with a national property tax".

Sunak is also understood to be considering an extension to stamp duty cuts and an increase in social welfare benefits.

The stamp duty tax holiday has helped homebuyers, and Rightmove, the estate agency website, has warned that up to 100,000 agreed home sales could be at risk by the end of the stamp duty holiday at the start of April.

The Times quoted senior government sources as saying that if the UK's COVID-19 vaccine rollout remains on track, Sunak will begin to address the deficit in the public finances by increasing corporation tax in the Budget.

The UK's furlough program, which subsidizes wages for temporarily laid-off workers, is currently due to run until the end of April. But the CBI, which represents 190,000 companies, said it wants the program extended by at least 3 months.

Its director-general Tony Danker said businesses want action now.

Quoted by Sky News, Danker said: "Many tough decisions for business owners on jobs, or even whether to carry on, will be made in the next few weeks.

"If the government plans to continue its support then I urge them to take action before the Budget which is still more than six weeks away.

"The government has done so much to support UK business through this crisis, we don't want to let slip all the hard work from 2020 with hope on the horizon."

The Guardian reported that in the CBI's Budget submission to the chancellor, the UK's leading employers' organization called on the government to "stimulate investment over the coming year "and "prepare the UK for the challenges of the coming decade".

A government source told The Times that the chancellor saw corporation tax as the fairest way to raise revenues as it will only hit UK businesses who have made profits.

However, Treasury minister Jesse Norman told a Treasury Select Committee on Monday that there was "no need to raise taxes" if the UK economy recovers strongly in the coming months.