Nothing like taking a hit in the polls to put soft Tories to work like real conservatives, right?
In the UK, Prime Minister Rishi Sunak had little to celebrate in his premiership’s first year, as the opposition Labour party is leading in the polls by a country mile.
So Sunak started many initiatives to regain his voter base by implementing conservative policies.
Now, The Prime Minister and his Chancellor (Finance Minister) Jeremy Hunt have drawn up plans not only to cut inheritance tax, but to do it sooner, rather than later – at next week’s Autumn Statement.
“Treasury officials have concluded the move would not be inflationary, meaning it passes a critical test that Mr. Hunt has set for tax cuts this autumn. It was confirmed on Wednesday that Mr. Sunak has delivered his promise to halve inflation this year, one of five priorities announced in a speech in January.
Reducing the inheritance tax rate would be welcomed by Tory backbenchers who have been lobbying for cuts to kick-start economic growth, with some threatening not to vote for the Autumn Statement if it raises taxes.”
Inheritance tax is charged on the part of someone’s estate which is above the tax-free threshold, which is currently £325,000.
“The current inheritance tax rate is 40 per cent. Cutting that by 10 percentage points would cost a few billion pounds, which is potentially affordable with the money Mr. Hunt has spare while still hitting his target of debt falling within five years.”
12-month inflation in October was 4.6 per cent, down from 10.7 per cent in January.
“Mr. Sunak insisted he wanted to continue reducing inflation, saying: ‘While it is welcome news that prices are no longer rising as quickly, we know many people are continuing to struggle, which is why we must stay the course to continue to get inflation all the way back down to 2 per cent’.”
Sunak told the House of Commons that he will cut taxes as the economy improves. He absolutely shared the ‘ambition to cut taxes for working people’.
The full scrapping of inheritance tax is, at this point, not to be on the table for the Autumn Statement, but the move is being considered for next spring instead.
“The Labour Party would be likely to criticize slashing inheritance tax, as they have opposed such proposals in the past. Just four per cent of estates paid inheritance tax in 2021, according to HMRC.”
The Guardian reported:
“Hunt is open to the idea of a cut partly because inheritance tax is highly unpopular with Conservative voters and partly because it would cost less than cutting income tax. The Times reported on Friday he was considering reducing the rate from 40% to either 30% or 20%, with a promise to abolish it altogether in the next Tory manifesto.
[…] The chancellor is also reported to be considering extending tax cuts for businesses that allow them to claim back what they spend on new machinery and office equipment in tax allowances. Hunt said in the spring that he would allow ‘full expensing’ for a trial period of three years, but is now said to be prepared to make the scheme permanent.”