Chancellor Rishi Sunak is said to be considering increasing corporation tax in the March Budget. Following the devastating impact from the coronavirus pandemic, the government now has an estimated £400bn deficit to pay off. The government has spent billions trying to support businesses and prevent job losses by introducing the Furlough Scheme and Business Support Grants.
The proposed plans to increase corporation tax, from the current rate of 19%, have received backlash. Some are calling for the tax to apply to larger, more stable UK companies, who have not seen a loss during the pandemic, rather than smaller companies who have been worst affected.
The government has been urged to help small companies get through the pandemic and after spending billions to try and save businesses and jobs, it would be illogical to hit them with an increased tax bill. The Chancellor’s plans are reportedly depending on the success of the vaccine roll out, which would allow for tax rises in the Budget.
Calls have been made for the government to extend the Furlough Scheme, along with the business rates holiday and VAT deferrals, for at least a further three months to help businesses get through these challenging times.