Chancellor Rishi Sunak is preparing to cut income tax by 2 pence to the pound or slash rates of Value Added Tax (VAT) before the next election, says a report. Sunak has reportedly told officials to chalk up detailed plans to reduce the tax burden, with a third option to cut inheritance tax also on the table.
The report said Sunak’s preference is to be an income tax cut over the next three years as part of a “retail” offer before 2024 when the next general election is expected. A Treasury spokesperson was quoted as saying, “We have been clear that we want to see taxes going down by the end of this Parliament and keep the tax system under review. We do not comment on speculation about specific tax change.”
Sunak had said in early October that he has had to raise taxes to help pay for the huge spending response to the Covid-19 crisis, however, going forward he wanted to cut taxes. Meanwhile, the report also stated the Treasury is working on plans to increase the threshold for inheritance tax, which is £325,000 unless it involves property left to children when it is higher.