More than half of voters in Great Britain would support an excess profits tax on companies realizing profits “significantly above their normal levels” during the coronavirus pandemic, according to a YouGov survey.
Fifty-three percent of respondents said they would strongly support or “tend to support” such a tax, while just 13 percent opposed the idea. Supermarkets have thrived during the lockdown, the Financial Times noted on May 17, adding that food retailers argue that “their record March may not translate into a profit boost over the full year because of the money they have spent hiring tens of thousands of new staff, expanding home delivery services, and putting in place social distancing measures in stores.”
The survey commissioned by NEON, a network of campaign groups, found that 82 percent opposed government bailouts for companies registered in offshore tax havens.
Sixty-one percent said they would support the introduction, after the COVID-19 pandemic, of a wealth tax based on a percentage of net worth over £750,000 excluding a person’s main home and personal pension savings. Fourteen percent of respondents opposed the policy. YouGov interviewed 1,682 people between May 7 and 11.
The Scottish government has signaled its support for a Scottish Green Party proposal to prevent companies registered in tax havens from receiving taxpayer-funded bailouts related to COVID-19, The National reported on May 18. A spokeswoman said the Scottish government is committed to “taking the toughest possible approach to tackling tax avoidance” where it has the powers to do so. “We strongly sympathize with the aims of [proposed amendments to emergency coronavirus legislation] and are giving detailed consideration to the issue,” she added.
The Welsh government announced on May 15 that it will exclude businesses “owned by a company or individual living in a 100 percent tax haven” from financial support under its Economic Resilience Fund.
“The public are hungry for a new deal when we rebuild after this crisis. The government is under huge public pressure not to cave into supporting tax haven companies and it is clear that Brits want to see those who can afford it to shoulder a greater part of the burden to help pay for public services. The message is clear, no more business as usual,” Robert Palmer, executive director of the campaign group Tax Justice UK, said in a May 13 release.
Governments have expressed a strong desire to ensure that financial support “does not end up in the hands of tax avoiders,” TaxWatch UK, a think tank, said in a May 9 briefing note. But excluding companies based in tax havens would have limited effect because of “problems with defining tax havens,” it suggested.
TaxWatch UK also recognized that there are “legitimate concerns” that such policies would harm workers. A more effective approach might be to discourage avoidance by “increasing transparency on tax disclosures and by making access to government support programs today and in the future dependent on tax compliance,” it argued.
Self-Employment Income Support Scheme
More than 2 million claims for grants worth £6 billion in total had been claimed by the end of May 17 under the self-employment income support scheme, Chancellor of the Exchequer Rishi Sunak told members of Parliament during Treasury questions on May 18. Claimants will have the money in their bank accounts within six working days of their claim, Sunak said, adding that he will keep the scheme under review.
Labour MP Tracy Brabin told Sunak that “tens of thousands” of people are still missing out, including new starters, “Pay As You Earn freelancers,” those paid through dividends, and those earning over £50,000.
“I do not believe that removing the £50,000 cap would be the right or socially just thing to do. The average income of those above the cap is £200,000, and 95 percent of those who are self-employed fall underneath the cap,” Sunak replied.
Asked what steps he is taking to support the economy during the COVID-19 outbreak, Sunak said the government’s plan to support businesses and individuals is one of the most comprehensive in the world.
“We have provided tens of billions of pounds in cash grants, tax cuts, and discounted loans for businesses; deferred taxes for those who are self-employed, employed, and in business; a world-leading job retention scheme to keep as many people in employment as possible; income protection for the self-employed; and a strengthened safety net to protect the most vulnerable in our society,” Sunak said.
“As of the end of last week, 8 million people from about 1 million businesses are covered by the [coronavirus job retention scheme] and having their wages paid by the government to protect their jobs and their future security,” Sunak added.
Citing press reports that HM Treasury is considering asking employers to pay 40 percent of employee wages in the job retention scheme starting in August, Labour’s Shadow Chancellor Anneliese Dodds suggested that such a move “risks a massive spike in job losses.”
“We are in deep consultation with both unions and business groups to ensure that we get the design right for the second part of this scheme. It is right both for the economy and, indeed, for the taxpayer to ask employers to make a contribution to paying the wages of their employees,” Sunak said.