Connect with us

Hi, what are you looking for?


Rishi Sunak urged to allow tax refunds for Covid losses

Rishi Sunak

MPs are calling on Rishi Sunak to allow businesses to offset pandemic losses with a corporation tax refund as pressure mounts on the chancellor to prioritise incentives for investment over tax rises in his budget on Wednesday.

The Treasury select committee said that now was not the time to raise taxes and it urged the government to introduce a rebate for trading losses at firms that had been profitable and had paid tax in Britain before the pandemic.

Under the “loss carry-back” scheme, companies and self-employed people would offset the tax relief against up to three previously profitable tax years and would get back tax already paid. A similar policy was adopted during economic crises in 1991 and 2008.

Sir Paul Marshall, co-founder of Marshall Wace, the hedge fund, writes in The Times today: “Anybody who works in business and investment understands just how important even marginal differences in corporation tax rates are to decisions about company domicile and investment. Unfortunately for the UK, most Treasury civil servants have no experience of business.”

The committee’s loss offset idea forms part of its report on post-pandemic tax reform. Mel Stride, its Conservative chairman, said: “With our public finances on an unsustainable long-term trajectory, our clear message is that budget 2021 is not the time for tax rises or fiscal consolidation, which could undermine the . . . recovery.”

MPs called for the chancellor to increase investment incentives for businesses, including extending the annual investment allowance, which provides tax relief for spending on equipment.

They said that a windfall tax on profits that had resulted from the pandemic would be difficult to apply this year because of the challenge of identifying sectors to which the tax should apply. However, they said that a windfall tax in certain circumstances in the future should not be ruled out.

The chancellor is understood to have considered a tax on the insurance industry amid public anger about its refusal to pay out on many business interruption claims. Suspending a plan to reduce the scope of the bank levy this year was also looked at. Both appear to have been shelved to prioritise making companies competitive, sources said.

Reforms to pension tax relief and stamp duty land tax, which affect how often and when people move house, should be prioritised, the report says.

A moderate increase in the rate of corporation tax could raise revenue without damaging growth, especially if balanced with measures to support business, MPs said. Big businesses have railed against a rise in corporation tax, warning it could delay the recovery.

A poll of business leaders by BDO, an accountancy firm, found that 85 per cent wanted the government to expand digital taxes to cover more online sales. A little over half said that the government should use post-Brexit freedoms to increase business innovation by supporting a reduction in carbon dioxide emissions, including by giving tax reliefs when companies invest to meet environmental standards.

Paul Falvey, tax partner at BDO, the advisory firm, said: “Business leaders are looking for the government to introduce progressive steps to help individuals and businesses flourish. This survey shows that most business leaders accept that higher taxes on companies will be a key component to the post-Covid-19 recovery and would like the chancellor to overhaul business rates, digital taxes and green taxes.”

The Institute of Economic Affairs called for “a low and radically simplified tax system” to support an economic recovery. The Centre for Policy Studies said that any immediate tax rises would be a “mistake” and tax rises on business would be an even “greater error”.

Read more:
Rishi Sunak urged to allow tax refunds for Covid losses

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



The national pig herd has lost-one tenth of all sows over the last six months, farmers’ associations have revealed, after breeders were forced into...


EasyJet plunged £213 million into the red in the Christmas quarter and is still burning through £150 million in cash each month, putting its...


A new range of healthy yet indulgent cookies will launch in Booths this month for just £1 per pack with the UK-born snacks by...


Payments firm has raised $1bn (£730m), giving it a $40bn (£29bn) valuation and crowning it the UK’s most valuable private fintech. The London-headquartered...


Sylvera, a UK-based startup that provides ratings for carbon offsets, has raised $32.6m (£24.1m) in a Series A funding round to accelerate and expand...


UK-based fintech Everything has raised €2m (£1.67m) to reinvent a decades-old financial product: premium bonds. The raise was led by a group of angel...

You May Also Like


Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...


Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...


Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...


As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.