Huge £ 20bn ‘five-fold’ tax increases are being considered for coronavirus recovery

The Treasury is reportedly considering tax increases of up to £ 20bn to meet the cost of the coronavirus crisis.

But Number 10 opposes the plans, potentially a “fivefold hit” of tax increases.

Treasury officials hope that the largest program of tax increases, which could amount to £ 20bn a year, in a generation could plug the holes in public finances caused by the pandemic, the Sunday Telegraph reports.

But Boris Johnson is reportedly on a collision course with Rishi Sunak over the plans, and Number 10 prefers spending cuts for Whitehall departments.

There are said to be fears of taxing central England amid the already damaging pandemic, and Downing Street is only willing to hit the wealthiest with tax increases.

Ministers are considering announcing increases in capital gains tax and corporation tax starting from the November budget, says the Sunday Times.

The money could be recovered from pensions, businesses, the rich, and foreign aid.

Chancellor Sunak is reportedly considering raising corporate tax from 19% to 24% to increase revenue by £ 12bn next year.

Capital gains tax could also be paid at the same rate as income tax, depending on the ideas being explored.

The pension tax relief could be “cut” under measures the Treasury is considering to help pay for the Covid-19 crisis, the Sunday Telegraph reports.

The newspaper also said the fuel increase and other tasks were also being discussed.

A revamp of the inheritance tax system and the introduction of an online sales tax were also being considered.

The international development budget could also be affected by Treasury reassessments due to the cost of the pandemic, it was stated.

The aid budget has already been cut by £ 2.9bn from £ 15.8bn this year, due to the contraction in the economy caused by the Covid-19 outbreak.

However, the government insists that it continues to fulfill its obligation to contribute 0.7% of gross national income (GNI) to international development.

The government had to raise billions to pay for the licensing scheme, while Britain’s GDP plummeted by more than 20% in the early stages of the crisis when businesses closed.

Treasury sources said they do not comment on what may or may not be in the next Budget.

Businesses urge the government to focus on new support measures to aid recovery and “invest in growth.”