Chancellor considers middle class tax test to pay COVID debt mountain | UK News

London, United Kingdom - July 6, 2016: HM Revenue and customs forms background with British currency coins. HMRC is the department of the UK government that is responsible for the collection of taxes.

Capital gains tax may be increased to help repay the billions of pounds borrowed to support the economy during the COVID-19 epidemic.

In a statement appointed by President Rishi Sunak, the treasury said it could raise Rs 14 billion by raising capital gains tax rates in line with income tax.

Capital gains tax is used on profits from the sale or disposal of other assets such as shares and second home, with an annual payment of 3 12,300.

, 3 The Office of Tax Simplification recommended that the government consider reducing allowances from 12 2,000 to 4 4,000.

But doing so and doubling rates (currently 10% for base rate taxpayers and 20% for higher rate taxpayers) may encourage people to change their financial behavior, the report said.

Bill Dodwell, OTS ‘director of taxation, said: “If the government considers simplification to minimize behavioral mitigation, it should consider linking capital gains tax rates more closely to income tax rates or dealing with border issues between capital gains. Taxes and income tax.”

Only 0.5% of the population paid capital gains tax in 2017-18. About 265,000 people paid $ 3.3 billion to the Treasury, 60%, (31.2 million people) paid $ 180 billion in income tax.

The National debt has exceeded t 2trn For the first time in July, the economy was hit by the effects of the corona virus epidemic and the cost of supporting businesses and workers.

At the time, Mr Sunak warned that “tough decisions” had to be made.

The review was scheduled for July, but did not follow treasury recommendations.

This comes after another report suggested that we should have people earning more than $ 19,500 a year Pay higher taxes on income tax to help raise public funds.

The resolution recommended a ‘health and social security tax’ – 4% tax on all income above 500 and 12,500 – which would be offset by a 3% reduction in employees’ national insurance and the abolition of self-class 2 national insurance contributions. Work.

It said the change would not impose fines on those affected by the virus crisis – low-wage and self-employed – but would raise $ 17 billion annually. Of that amount, $ 6 billion was recommended to go to Social Security.

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