Will UK taxes be increased to help pay for coronavirus?

It’s clear that the UK – along with the rest of the world – is facing the worst economic crisis for many years.

But how will the Government pay for the vast sums being borrowed? Peter Webb, our International Tax Manager, explores the possible options.

When it comes to taxation, the UK has a precedent for using it to pay for significant events; Income Tax was first introduced in the UK to help cover the cost of the Napoleonic wars. So it’s reasonable to consider that an increase in tax rates could be used to offset the enormous borrowing the Government is currently undertaking, particularly given the vast sums involved. Indeed, the budget deficit for the 2020/2021 financial year is expected to total around £280 billion.


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