UK’s Sunak plans tax cuts to boost COVID recovery, The Times reports

Published 06/07/2020 in Business News, Economy & Finance

UK’s Sunak plans tax cuts to boost COVID recovery, The Times reports

LONDON (Reuters) – British finance minister Rishi Sunak will try to restart the country’s economy by giving homebuyers a tax break and cutting value-added tax for pubs, restaurants and other hospitality firms, The Times newspaper reported.

Sunak is due to announce on Wednesday the next stage of his attempt to steer the world’s fifth-biggest economy away from its 25% collapse in March and April, when the government’s coronavirus lockdown shut entire sectors.

Sunak’s plan is expected to focus on measures to limit a rise in unemployment — including help for job-seekers and trainees — but the measures reported by The Times suggest he also sees a need to boost demand with tax cuts.

Sunak will say he will raise the property tax threshold to as high as 500,000 pounds ($623,700), four times its current level. That would exempt most homebuyers from paying any stamp duty for up to a year, the newspaper SSPG.L), which said it could cut about 5,000 staff.

A Bank of England survey published on July 2 showed companies expected an average 11% drop in employment for the third and fourth quarters of 2020.

Sunak’s spending push and a plunge in tax revenues are expected to create budget deficit that could hit 15% of economic output, levels not seen since World War Two.

The finance ministry declined to comment on the reports in The Times and the Guardian.

Over the weekend, the ministry said Sunak would announce the largest-ever increase in traineeships and double the number of its job coaches.

Prime Minister Boris Johnson last week said he would fast-track infrastructure investment and slash property planning rules.

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