Labour calls for UK tax cut extensions before 3 March Budget
Labour is calling for an extension to tax cuts for some of the UK sectors worst affected by the Covid pandemic.
Shadow chancellor Anneliese Dodds today urged Rishi Sunak to extend the current VAT cut, from 20 per cent to five per cent, for retail and hospitality for another six months past March or or until three months after the lifting of health restrictions – whichever comes later.
Dodds is also calling for the current business rates holiday to be extended past the end of the current financial year.
She said the UK’s “businesses can’t wait another month until the [3 March] Budget” to see if these tax cuts will be extended.
“The chancellor has acted at the last minute time and again during this crisis – and that dither and delay has created uncertainty for businesses, cost jobs and threatened our recovery,” she said.
“Britain can’t afford the Chancellor to make the same irresponsible mistake all over again. He must announce these continued tax cuts now, not wait another month and risk even more job losses.”
It comes as The Sunday Times revealed today that Sunak was considering hitting digital marketplaces with an online sales tax.
The government is also considering a so-called “excessive profits tax” on UK firms that have seen marked increase in earnings due to the Covid pandemic.
Companies most likely hit by the taxes would be Amazon, Asos, food delivery apps like Ocado, Just Eat and Deliveroo, and the big supermarkets.
A Treasury spokesperson said: “The Office of Budget Responsibility, the Bank of England and the International Monetary Fund (IMF) have all recognised that our economic response is saving jobs, keeping businesses afloat, and supporting people’s incomes.
“The IMF described our £280bn package of support as ‘one of the best examples of coordinated action globally’ and all businesses required to close can continue to access our grant schemes, which for the period of national lockdown will be worth up to £13,500 per business.
“We’ll have a Budget in early March to take stock of our wider support, and set out the next stage in our economic response.”