Treasury's shock demands

Tax hike bombshell to pay for Covid crisis

Rishi Sunak

Rishi Sunak and Boris Johnson may be loggerheads over tax

Taxpayers are likely to be hammered to pay for the cost of dealing with the Covid emergency, according to Whitehall sources.

The raid would raise an initial £20 billion towards the cost of rescuing companies and jobs, and help compensate for the loss of tax revenue.

It is thought the Treasury’s proposals include aligning capital gains tax with income tax, slashing pension tax relief, raising fuel duties and introducing an online sales tax.

Downing Street is said to be opposed to the proposals which would particularly hit middle income earners and key Tory seats, says the Sunday Telegraph.

Number 10 is said to prefer a tightening of government spending and believes departments have not been tough enough in meeting targets.

Business leaders say introducing tax burdens would merely add to the pressures on companies and the economy.

Instead they want the government to focus on measures that would stimulate growth.

Comment: Now’s the time for Johnson to reform taxation

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