PEOPLE should brace themselves for rises to income tax, VAT and National Insurance in the years ahead to help the UK Government begin filling the financial black hole left by the coronavirus crisis, the Institute for Fiscal Studies has warned.

Ahead of Chancellor Rishi Sunak’s Budget on March 3, the respected financial think-tank said around £60 billion might be needed to be raised through taxes in the coming years to help the economy recover and stay on top of its debts.

During the financial year ending in March, the Government is expected to have borrowed around £400bn, several times higher than normal.

“If we’re really looking at these amounts of money…it is hard to see how we do that without looking at the big taxes,” declared Paul Johnson, the IFS’s Chief Executive.

“While there are lots of things one might want to do, such as wealth taxes or fixing environmental taxes and so on, in the end, if we’re looking at raising a couple of percent of national income or more, it’s pretty hard to see how you get that without taxing incomes or spending, because that’s where…the very large majority of tax comes from.”

Mr Johnson’s colleague Helen Miller agreed that it would be “difficult to get really big sums, if you tie your hands and do nothing” on income tax, national insurance and VAT.

“But,” she argued, “the Government should look at the bits of the tax system that are either currently very unfair or currently broken and try to reform those in a way that would also raise some revenues.”

Ms Miller singled out inheritance, capital gains and council tax, as well as the difference in the rate of tax paid by business owners and employees.

“We should reform our system because badly designed taxes basically mean that taxes are more damaging than they otherwise would be. And, of course, that matters at all points of time, but now when the economy is doing badly, we need to make the damage as low as possible,” she added.

Yet Boris Johnson pledged a “triple tax lock” for the whole five years of this Westminster Parliament in the 2019 Conservative manifesto, which ruled out any rise in income tax, VAT or National Insurance.

Two weeks ago, Mr Sunak announced the triple tax lock promise would stay, meaning he will have to look elsewhere to raise large sums of money such as from hikes in corporation tax, capital gains tax and possibly a new digital sales tax dubbed the “Amazon tax”.

A 1% rise in income tax or National Insurance would raise around £6bn every year.

The Chancellor is expected to announce only limited if any tax increases in his March 3 Budget as he seeks to help secure an initial recovery from the Covid crisis. However, tax rises are set to follow with the expectation that Mr Sunak will hold a second, more painful, Budget towards the end of the year.