The Treasury Committee has urged Chancellor Rishi Sunak to outline plans for a long-term tax strategy to help the UK economy recover from the coronavirus (COVID-19) pandemic.
In a new report, the Committee stated that public finances are ‘on an unsustainable long-term trajectory’ as a result of projections of rising age-related spending based on existing government commitments and the fiscal impact of the COVID-19 pandemic.
The Treasury Committee suggested that now is not the time for tax rises or fiscal consolidation. However, it said that significant fiscal measures will most likely be needed in the future, which will require a reformation of the UK tax system.
In the report, the Committee made a series of recommendations, including moderately increasing the rate of corporation tax; supporting businesses by introducing a temporary three-year loss carry-back for trading losses in both incorporated and un-incorporated businesses; and reforming the entire approach to pension tax relief.
Further information on the Committee’s recommendations can be found here.