Jeremy Hunt considers main advantages squeeze to assist slash inheritance tax

The chancellor has warned “difficult decisions” must be made to “reform the welfare state” as he mulls introducing controversial tax cuts in subsequent week’s autumn assertion.

Jeremy Hunt mentioned there’s “no easy way to reduce the tax burden” following stories he is seeking to slash inheritance tax and levies on companies.

Tax ranges are at a 70-year-high, in response to the Institute for Fiscal Studies suppose tank, and Rishi Sunak is beneath rising stress from the Tory proper to get them down earlier than the next general election.

Mr Hunt is alleged to be contemplating an enormous squeeze on advantages with a purpose to discover financial savings in subsequent Wednesday’s assertion, successfully reducing working age welfare funds for thousands and thousands of individuals.

Speaking in Milton Keynes on Saturday, Mr Hunt mentioned: “There’s no straightforward option to scale back the tax burden.

“What we need to do is take difficult decisions to reform the welfare state.”

Can the chancellor elevate the gloom? Watch dwell protection on Sky News of the autumn assertion from 11am on Wednesday

Typically, ministers uprate working age advantages primarily based on the September determine for inflation – so a 6.7% hike.

But the chancellor has not dominated out utilizing October’s determine as a substitute, which might imply a 4.6% rise.

Economists say this may equate to a £3bn spending minimize, largely impacting households receiving means-tested or incapacity advantages.

The transfer could be sure to attract criticism for supporting the rich whereas others wrestle with the price of dwelling.

Conservative former chancellor Lord Clarke mentioned some voters would discover it “appalling”.

Slashing inheritance tax – which is charged at 40% on estates of greater than £325,000, with an additional £175,000 in the direction of a major residence handed to direct descendants – would solely assist a comparatively small share of the inhabitants.

Just 4% of deaths in 2020/21 resulted in any being paid.

The choices for reducing the tax embrace lowering it by 50%, 30% or 20%, in response to The Times.

‘We will take path to tax cuts’

Mr Hunt has appeared to tease the cuts, claiming the UK has reached “a turning point for the economy”.

He informed The Telegraph this week: “The big message on tax cuts is there is a path to reducing the tax burden and a Conservative government will take that path.”

Reports recommend the Tories may pledge to abolish inheritance tax fully forward of subsequent yr’s election.

It may price £7bn a yr within the brief time period, however the Institute for Fiscal Studies forecast the quantity that the tax raises may rise to greater than £15bn by 2033.