Chancellor Rishi Sunak is expected to announce an increase in corporation tax in the Spring Budget on March 3rd, increasing the tax from 19p in the pound to 23p in the pound by the time the next general election is held.

A report in the Sunday Times, featured by Reuters, revealed that the tax hike is intended to help pay for an extension of the coronavirus-related support schemes, with the move expected to raise £12 billion each year.

Sources close to the government appeared to confirm that that the tax hike will be “higher than expected and the extension of the support schemes will be longer than most people expect”.

The news report also suggested that at least 1p is due to be added to the tax bill for corporations from autumn 2021, costing businesses £3 billion, with further rises set to be brought in annually. However, clarification was given from allies of Mr Sunak, who reportedly said the Chancellor wouldn’t increase corporation tax above 23 per cent.

However, according to City AM, conservative rebels are now preparing to come together and unite with Labour MPs to block this proposed hike in corporation tax when it goes to a vote in Parliament.

Former Brexit secretary David Davis, for example, said he would vote against the Budget if significant tax rises are included. And Labour leader Sir Keir Starmer issued a warning this week (February 22nd) that there should be no tax rises at all, as the country attempts to right itself from the worst economic output seen for 300 years.

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