UK: Sunak urged to crack down on tax avoidance instead of raising taxes as first resort.

As published on morningstaronline.co.uk, Monday 31 August, 2020.

CHANCELLOR Rishi Sunak was urged today to crack down on tax avoiders before including sweeping tax hikes in his November Budget.

It has been speculated that the Treasury could raise at least £20 billion through extra levies to pay for Covid-19 furlough payments, self-employment grants, business support loans and the half-price restaurant food scheme.

Chief Secretary to the Treasury Stephen Barclay refused to comment on reports that pension tax relief could be cut, capital gains tax and fuel duties increased, self-employed taxes increased and corporation tax raised from 19 per cent to 24 per cent.

There is also an online sales tax being mooted ahead of the Budget, which some say could help to level the playing field for high street retailers.

It comes after public-sector debt hit more than £2 trillion — higher than GDP — for the first time in history earlier this month.

The Office for National Statistics said that official bodies borrowed £27bn in July, the fourth-highest amount of any month since records began in 1993.

Clive Peedell, a doctor and co-founder of the National Health Action Party, said: “We wouldn’t need to raise taxes if we properly cracked down on tax evasion and avoidance.

“Unfortunately, no Tory government will ever upset their friends and funders,” he said.

Labour activist and author David Osland said that the “tax gap” between what should be paid and what is actually paid would cover the amount that the government is seeking to raise.

“If Rishi Sunak had the political will to crack down on corporate tax dodgers, he wouldn’t need today’s £30bn tax hike package,” he said.

Tax justice campaigner Richard Murphy said that some taxes on the wealthiest people should be raised to help boost incomes and living standards of the least wealthy.

“Let’s have tax increases for sure, but they must not be overall increases,” he said.

“Any money raised now must be used to give cuts to those least well off in our society. That’s what tax justice is about and it makes complete economic sense right now.”

The Tory government is also reportedly considering cuts to the foreign aid budget.

Shadow international development secretary Preet Kaur Gill said the move would backtrack on the Conservatives’ manifesto commitment to spend 0.7 per cent of gross national income on aid.

She added that reneging on the promise would “show that their word cannot be trusted.”