As Government borrowing decreases, it is reported that Jeremy Hunt is considering an inheritance tax cut in the Autumn Statement.
Following positive forecasts about the state of the nation’s finances, the Chancellor may be open to bringing forward plans for non-inflationary tax cuts next month depending on the independent figures.
It comes after the Office for Budget Responsibility calculated that a reversal in fortunes means the Treasury is now around £5.5 billion in the black.
As Government borrowing falls and the intake of tax rises, the Exchequer’s finances are predicted to only go up.
With inflation remaining high, at 6.7 percent, the Chancellor has ruled out personal tax cuts in the Autumn Statement as this could undermine efforts to bring this rate down to two percent by the end of the year.
However, The Telegraph reports he is open to measures that would not directly pump more money into the system, such as cutting inheritance tax, or stamp duty.
It should be noted that these predictions could change as it is based on independent figures, outside the Government’s control.
The reforms to inheritance tax could include reducing the headline 40 percent rate, or simplifying the system so that all families can pass on £1 million tax free.
Additionally, the reform to stamp duty could include a rebate for buyers who improve the energy efficiency of their new home within two years.
Mr Hunt will receive another update from the OBR on Tuesday, and then one further set of figures ahead of the Autumn Statement on November 22.
As things stand, it is more likely that the Chancellor will choose to leave tax cuts for now and wait to take bolder measures in his Spring Budget next year.
But he is coming under increasing pressure from Tory MPs to take swifter action after the party suffered two humiliating by-election defeats to Labour.
The Telegraph revealed that Sir John Redwood on the right of the party, who headed Margaret Thatcher’s policy unit, has submitted his own draft Autumn Statement to No 10 demanding tax cuts.
He urges ministers to crack down on benefits and delay Net Zero spending. Mr Redwood said: “The budget should go for tax cuts and spending controls which boost growth, cut inflation and cut the need to borrow.”
