Rishi looks at tax on homes
RISHI Sunak is likely to hit business with tax hikes in his spring budget – and is considering overhauling council tax and stamp duty.
There will be no radical change to property taxes in March but ministers and officials are looking at the abolition of the existing system of levies on homes.
Council tax and stamp duty could be replaced with a proportional tax based on the values of properties. Council tax is currently based on 1991 valuations.
Such a move would be controversial in the Tory shires since those with expensive homes in southern England would be likely to end up paying more.
However, supporters of the plan say it will benefit voters in the Red Wall seats in the North that the Tories won from Labour in 2019.
They also say scrapping stamp duty would remove the barrier to families trading up to a bigger home and elderly people in large houses down-sizing.
Corporation tax is likely to increase because the Chancellor regards it as the fairest way to begin raising significant sums of money.
It also targets business profits rather than people and firms who have been plunged into the red during the pandemic.
A senior Whitehall source said: “Things would have to go pretty badly wrong for us not to begin some consolidation in the budget.” Meanwhile, Mr Sunak wants to exploit the opportunities of quitting the EU. He is to head a new committee intended to shape the post-Brexit business environment with the idea that Britain can become a Singapore-style hub. The new body – which is called the Better Regulation Committee – will focus on big infrastructure projects that were hampered by European rules.
Singapore’s low-tax, low-regulation economy was frequently cited by Brexiteers as an example for post-EU Britain to emulate.
Mr Sunak said: “We have an opportunity to do things differently and this Government is committed to making the most of the freedoms that Brexit affords us.
“This isn’t about lowering standards but raising our eyes to look to the future.”