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Businesses and high net worth ‘tax cuts of £36bn under Rishi Sunak’

Businesses and the wealthy received almost £40 billion in tax cuts while Rishi Sunak was chancellor, leaving others to foot the bill for Britain’s post-pandemic recovery amid a cost-of-living crisis, according to new analysis.

Earlier this week, Mr Sunak rejected calls for an emergency budget to help struggling families after former prime minister Gordon Brown urged the government to announce more support before a “financial time bomb” bill growth in October “will push millions over the edge.”

On Monday, the leadership hopeful launched a fresh attack on rival Liz Truss’ plan to cut taxes in the emergency budget, calling it a “huge problem” for big businesses and the more affluent that would do little to help those most in need. .

But a review of the tax “winners and losers” in every budget that came under Mr Johnson and Mr. Sunak in Downing Street found that the Treasury was prioritizing tax breaks for businesses over helping individuals and families.

Tax Justice UK has estimated that the government has given businesses at least £35.8 billion in tax cuts compared to plans in place when Theresa May’s government left.

​​​​​​While households have benefited from support from the Treasury during the pandemic, new analysis shows that this has already been largely “paid for” by higher National Insurance contributions and a freeze in income tax bands, meaning , that ordinary workers pay billions in additional taxes just as the cost of living jumps.

Meanwhile, Mr Sunak has ignored calls not to reverse the £20-a-week rise in Universal Credit, which has slashed the incomes of millions of the least well-off.

It comes as separate analysis commissioned by Mr Brown found that the least well-off families would be up to £1,600 worse off this year, even after existing government support of up to £1,200 per family was paid out Yu.

Official figures show that the gap between top earners, including bankers and insurance brokers, can be negotiated for a pay rise, while for the lowest earners prices are far outpacing wage growth.


Taxes are tied to political choices and our analysis shows that Boris Johnson and Rishi Sunak have given tens of billions in handouts to businesses

Paul Hebden, UK Tax Justice

The Tax Justice UK report shows that Ms Sunak has also delivered a net reduction in wealth taxes of £2.2bn, mainly through the heavily criticized stamp duty holiday costing £5bn, while helping largely a well-to-do home owner. The move also helped inflate the UK property market, pushing prices further out of reach for first-time buyers.

Tom Peters, head of campaigning at Tax Justice UK, said the policy was “a simple problem for homeowners”.

Taxation and spending are at the center of the often bitter contest between Tory leadership contenders Ms Truss and Mr Sunak.

Ms Truss argued that tax cuts were the best way to solve Britain’s economic problems. She vowed to immediately end the national insurance hike introduced by Mr Sunak and reverse a planned rise in company tax, despite corporations posting record jumps in profits this year and economists warning the move would further fuel the glut the cost of living is rising.

The Labor leader outlined plans to fund the tax cuts through more government borrowing, a plan which was condemned by Mr Sunack as well as Labor leader Sir Keir Starmer, who called it “fabulous economics”.

Meanwhile, Mr Sunak sought to present himself as a sensible chancellor who would “talk” to the public about the need for higher taxes.

This week he unveiled a “three-part plan” to ease the pain of rising bills, consisting of “support for the most vulnerable, support for pensioners and some support for everyone”. Essay for The TimesMr Sunak said his plan could include support in the form of winter and cold weather payments, and that all households could expect an increase of around £200 from his VAT cut on their electricity bills.

The second part of the plan involves identifying and targeting the scale of support needed, with the expectation that a sharp rise in energy prices could leave households £400-500 worse off than when Mr Sunak announced his previous support package in May.

Thirdly, Mr Sunak said he would “lead a program to identify savings across Whitehall” to pay for his support scheme, which The Times said it would cost around £10bn.

Acting Chief Executive of Tax Justice UK Paul Hebden said: “Tax is about political choices and our analysis shows that Boris Johnson and Rishi Sunak have given tens of billions in handouts to businesses.


Mr Sunak also announced a windfall tax on oil and gas companies, but at the same time gave tax breaks for investment in new fossil fuel projects

“The idea from some conservative leadership candidates that the planned 2023 corporate tax hike should be reversed is misguided, given that working people are currently the only ones bearing the brunt of the cost of the COVID recovery.”

Mr Sunak has become known as a big-spending chancellor after borrowing more than £300bn to pay for support during the pandemic. Its business tax breaks have received less attention. The “super deduction” gave companies a 120 percent tax break on capital investment in the UK.

Critics argued that the policy, which cost the exchequer £17 billion, subsidized investment that big companies had already been planning for years.

This has not helped boost business investment, which has been slow to pick up since the Brexit referendum. It hasn’t produced stellar economic growth either, and the UK is headed for recession this year, driven in large part by soaring energy prices.

Other tax breaks included a cut in UK domestic flight tax, despite government pledges to reduce the UK’s net carbon emissions to zero.

Mr. Sunak also announced a tax on the profits of oil and gas companies, but at the same time gave tax breaks to invest in new fossil fuel projects.

Other controversial and expensive tax policies included cutting fuel duty by 5p after a two-year freeze. It cost the Exchequer £4.5 billion but did little to offset record high fuel prices.

Tom Peters, head of advocacy at Tax Justice UK, explained: “Fuel duty cuts disproportionately help wealthier families, who are more likely to own a car and drive more miles.

“You could also argue that it increases inflation because people will drive more than they would if the tolls weren’t cut.”

Businesses and high net worth ‘tax cuts of £36bn under Rishi Sunak’

Source link Businesses and high net worth ‘tax cuts of £36bn under Rishi Sunak’

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