Huge ‘quintuple whammy’ tax rises of £20bn being considered for coronavirus recovery

Tax hikes of up to £20 billion are reportedly being considered by the Treasury to deal with the cost of the coronavirus crisis.

But the plans, potentially a “quintuple whammy” of tax rises, are being opposed by Number 10.

Treasury officials are hoping the largest programme of tax increases, which could amount to £20bn a year, in a generation could plug holes in the 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, with Number 10 preferring cutbacks to Whitehall departments’ spending.

There are said to be fears of imposing taxes on Middle England amidst the already damaging pandemic, with Downing Street only willing to hit the very richest with tax rises.

Ministers are looking at announcing hikes to capital gains tax and corporation tax as early as the November Budget, the Sunday Times says.

The money could be clawed back from pensions, businesses, the wealthy, and foreign aid.

Chancellor Sunak is reportedly considering hiking corporation tax from 19% to 24% in order to boost revenue by £12 billion next year.

Capital gains tax might also be paid at the same rate as income tax, under the ideas being looked at.

Pension tax relief could be “slashed” under measures being considered by the Treasury to help pay for the Covid-19 crisis, the Sunday Telegraph reports.

The newspaper also said that raising fuel and other duties was also being looked at.

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

The international development budget could also be caught up in Treasury reappraisals due to the cost of the pandemic, it was claimed.

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

However, the Government insists it still meets its obligation to provide 0.7% of gross national income (GNI) to international development.

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

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

Businesses are urging the government to concentrate on further support measures to aid the recovery and “invest in growth”.