Prime Minister Rishi Sunak is reportedly considering implementing stamp duty reductions and other tax cuts for high earners following the Conservative Party’s recent by-election defeats. Senior members of the party are advocating for a stamp duty cut to be included in the general election manifesto, should the economy show signs of improvement. Additionally, there are discussions about introducing a separate tax cut for the UK’s highest earners, who amount to approximately 5 million individuals, according to the Daily Telegraph.
These proposed measures are aimed at rallying voters ahead of the anticipated general elections in late 2024. The by-elections held on Thursday saw the opposition Labour Party unexpectedly securing parliamentary seats, overturning significant Conservative majorities. This outcome indicates that Labour is on a trajectory to regain power from the Conservatives, a position they have not held since 2010.
The Conservatives are deliberating between implementing stamp duty cuts or abolishing inheritance tax instead, as reported by the Times. Downing Street has undertaken surveys to ascertain which action would provide the greatest boost to the party’s prospects in the upcoming general election. It is anticipated that these measures could be announced as early as the spring budget of 2024.
Recent data reveals that UK government borrowing was lower than anticipated in the previous month, owing to a tax boost triggered by inflation. This places pressure on the government to consider tax cuts. However, Chancellor Jeremy Hunt has emphasized that he has limited flexibility due to the elevated interest rates, which have driven up costs associated with servicing the national debt.
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