Windfall Tax and Triple Tax Lock in Budget 2021?
Published / Last Updated on 09/02/2021
Speculation is growing even more about the contents of Rishi Sunak’s 3rd March 2021 Budget.
It is interesting than an aide to Mr Sunak had allegedly highlighted that it was clear in the Conservative Party Election Manifesto of 2019 that they promised a Triple Tax Lock. Not the Triple Lock that we all know about regarding state pension increases of the higher of CPI inflation, wages inflation and 2.5%pa but the Triple Tax Lock of not changing Income Tax, National Insurance Contributions and VAT to pay for National Debt.
We have already speculated on wealth taxes and capital gains taxes and we are sure that the Treasury would like to break the Triple Tax Lock to fund the ever increasing £400bn covid-19 debt. Politically, we believe it is too early for Mr Sunak to break that promise given that we are still in lock down and fighting this 2nd coronavirus wave.
That said:
Corporation Tax in the UK is the lowest of the G7 economies and strategically lower than France and Germany although not Ireland. This could be attacked without breaking promises. In particular, those huge international firms that offer online services in the UK but pay hardly any UK corporate taxes.
Inheritance Tax has barely been mentioned with the exception that capital gains tax could be levied on assets that would usually be exempt from capital gains tax on death.
Trusts have not been mentioned and it would be very easy to remove allowance and treat trusts, where swathes of the super rich hold assets. HMRC has quietly built the Trusts Register and now HMRC know who has a trust and what type of trust it is – an easy target we feel.
Windfall Tax: There are manty businesses that have profited hugely from lock down and covid-19. Online retailers, suppliers of protective equipment etc have made billions and even now some have landed government contracts in their £millions and simply not delivered hardware, goods or It platforms
