Capital gains could be increased to repay the billions of pounds borrowed to support the economy during the COVID-19 epidemic.
A report commissioned by Chancellor Ishii Sunak said the Treasury could raise the capital income tax rate by 14 14 billion to bring it in line with income tax.
Capital gains tax is levied on profits from the sale or disposal of shares or other assets, such as annual allowances allow 12,300 with
The Office of Tax Simplification recommends that the government reduce the allowance to 12,300 and consider between 2,000 2,000 and 4 4,000.
But doing so and doubling the rates (currently 10% for basic-rate taxpayers and 20% for high-rate taxpayers) could encourage people to change their financial behavior, the report said.
Bill Dodwell, director of taxation at OTS, said: “If the government considers the simplification priority to reduce distortions in behavior, it should consider the income tax rate more closely with the income tax rate, or address the border issues between capital gains and income tax.”
Only 0.5% of the population paid capital gains tax in 2017-18. About 255,000 people paid ৩ 6.3 billion to the Treasury, but 60%, (31.2 million people) paid ৮ 180 billion in income tax.
The National debt n tr 2trn pass For the first time in July, the economy was hit by the effects of the coronavirus epidemic and the costs of supporting businesses and workers.
At the time, Mr Sunak warned that “tough decisions” needed to be made.
The review was launched in July but does not have to follow Treasury recommendations.
It suggested another report that people could earn more than ,500 19,500 a year Pay more income tax on public financial development.
The Resolution Foundation recommends a ‘health and social care recovery’ – a 4% tax on income over 12 12,500, which will be offset by a 3% reduction in national insurance for employees and the cancellation of Class 2 National Insurance contributions for the self-employed.
It says the people most affected by the virus crisis – low-wage and self-employed – will not raise ১ 1 billion a year. It was suggested that পরিমাণ 6 billion of this amount should go to social care.
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