Sunday 28 February 2021 11:01 am

Budget 2021: Sunak eyes tax on online deliveries and freelance workers

Rishi Sunak is reportedly preparing to announce new taxes on online deliveries and freelance workers in Wednesday’s Budget to help pay off the UK’s Covid spending.

The tax would likely target online firms like Amazon and Asos who have seen profits soar over the past year, after people spent much of 2020 in lockdown.

It comes as the Treasury announced last night a new £5bn fund for retail companies forced to close during this latest Covid lockdown.

The Sunday Telegraph reports that Sunak’s Budget on Wednesday will unveil a number of consultations on potential new taxes, including an option to raise taxes on online retail companies.

This could come in the form of a new green tax on online delivery items.

This would come after Sunak announced his digital services tax last year, which taxes online marketplaces – like Amazon – for business they do in the UK.

Sunak refused to answer questions this morning on whether he would implement another digital tax this year.

However, a Treasury source told The Telegraph: “The idea of an online sales tax is being looked at as part of the business rates review.  

Before the Open newsletter: Start your day with the City View podcast and key market data

“Responses to the consultation are being considered in the round, but the chancellor is cognisant of the need to level up the playing field between the high street and online taxation.”

The Budget will also include plans to increase National Insurance contributions by self-employed Britons.

This was a move that Sunak touted last year when he announced a new Covid support scheme for self-employed workers.

He said: “It is now much harder to justify the inconsistent contributions between people of different employment statuses. If we all want to benefit equally from state support, we must all ‘pay in’ equally in future.”

The measures could come alongside a plan to increase corporation tax from 19 per cent up to 25 per cent over the next few years.

The Sunday Times also reports today that the chancellor will freeze the threshold at which people start to pay income tax at £12,500 for three years and freeze the rate at which people start to pay the 40p rate at £40,000 for three years.

This could bring in an extra £6bn a year without breaking the Tories’ 2019 manifesto pledge to not raise income tax.

Sunak has spent more than £300bn in the past year on Covid, bringing the deficit to a record £400bn.