Rishi Sunak has distanced himself from reports that he is looking at increasing capital gains tax to help pay for the government’s Covid-19 spending.

The Treasury announced this week it was commissioning the Tax Simplification Office to conduct a study in order to seek views “about capital gains tax”, prompting speculation that the chancellor was planning to hike taxes for buy-to-let landlords and other property owners, as part of wider plans to tackle an expected £350bn deficit this year.

But Sunak told Westminster’s Treasury Select Committee yesterday that the review was an administrative formality and not a sign he plans to increase capital gains tax.

He said: “It’s a reasonably business as usual practice for the Treasury to ask the Tax Simplification Office to examine various parts of our tax system to make sure they’re up to date. 

“It happens every year, so the last year or two the Tax Simplification Office looked at inheritance tax, before that they looked at capital relief, before that they’ve looked at VAT, they’ve looked at stamp duty and before that income tax and national insurance.

“So I think, actually, that capital gains tax is the only one they haven’t looked at if you look at everything they’ve done over the last few years.”