By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Celebrity NewsCelebrity News
  • Home
  • Beauty
  • Celebrities
  • Fashion
  • Lifestyle
  • Movies
  • Sport
  • World News
  • Contact
Search
Technology
  • Blog
  • Advertise
Health
  • Blog
  • Advertise
© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.
Reading: Liz Truss plans to hike income tax thresholds
Share
Sign In
Notification Show More
Latest News
Celebrating January 24 Birthdays: A Look at Famous Figures Born on this Day
January 24, 2023
Keeping Up with Celebrity Scandals: A Look at the Top Websites for Gossip and News
January 18, 2023
PR Movies: A glimpse into the world of celebrity
January 2, 2023
10 Famous Women Who Have Openly Talked About Their Mental Health Problems
December 22, 2022
The Worst Celebrity Tattoos
December 9, 2022
Aa
Celebrity NewsCelebrity News
Aa
  • Fashion
  • Sport
  • Movies
  • Beauty
  • World News
  • Celebrities
  • Lifestyle
Search
  • Fashion
  • Sport
  • Movies
  • Beauty
  • World News
  • Celebrities
  • Lifestyle
Have an existing account? Sign In
Follow US
  • Blog
  • Advertise
© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.
Celebrity News > Blog > World News > Liz Truss plans to hike income tax thresholds
World News

Liz Truss plans to hike income tax thresholds

Robin Deberry
Robin Deberry August 29, 2022
Updated 2022/08/29 at 5:27 AM
Share
10 Min Read
SHARE

Liz Truss plans to hike income tax thresholds as part of rescue package to help families through cost of living crisis

  • Miss Truss is planning an emergency budget next month to reverse tax rises 
  • The Foreign Secretary will consider cutting the rate of VAT by 5% temporarily
  • But sourced said Truss has ruled out copying Sunak’s £400 energy bill discount 

Liz Truss is poised to raise income tax thresholds as part of a major package of measures designed to ease the cost of living crunch.

Contents
Liz Truss plans to hike income tax thresholds as part of rescue package to help families through cost of living crisisSolutions Liz could turn to as Prime Minister 

The Foreign Secretary will also consider the ‘nuclear option’ of temporarily cutting the headline rate of VAT by 5 per cent, at an estimated cost of £30billion.

But sources said the leadership frontrunner has all but ruled out adding to the universal £400 energy bill discount agreed by her rival Rishi Sunak earlier this year.

Instead, direct support is likely to focus on targeted measures, such as increasing the winter fuel allowance for pensioners and helping those on universal credit.

Miss Truss had already pledged to hold an emergency budget next month to reverse some of the tax rises imposed by Mr Sunak, including those to national insurance and corporation tax.

She has also promised to suspend green levies on energy bills. But, as the scale of the crisis becomes clearer, she is now considering emergency tax cuts to put more cash back in people’s pockets.

A senior ally of Miss Truss said she was ‘certain’ to end the four-year freeze in income tax thresholds which was brought in by Mr Sunak last year to help pay off the huge cost of dealing with Covid.

Lizz Truss is set to raise income tax threshold to help fend off the cost of living crisis: ‘A recession is not inevitable, but we need to make sure we don’t talk ourselves into one. I don’t believe in managed decline. And I won’t accept it. I believe in hope over fear’

The Treasury has drawn up proposals for a temporary cut in the headline rate of VAT by either 2.5 per cent or 5 per cent from its current rate of 20 per cent

The freeze, which was forecast to raise £8.1billion a year, was introduced at a time when inflation was below two per cent.

However, with inflation hitting 10.1 per cent and forecast by some to double next year, the freeze is set to raise vast sums and drag millions of people into paying more tax.

A senior ally of Miss Truss said: ‘One thing you can be certain of is the freeze on thresholds is going to end early.

‘When inflation is running at 10 per cent you cannot have the thresholds frozen because you will have people paying a higher proportion of tax on their income at a time when bills are going through the roof.’

Tax cuts are being considered to stave off a recession, which Miss Truss insisted yesterday was ‘not inevitable’. She told the Mail on Sunday she had a ‘clear plan to get Britain through this storm and out the other side’.

She added: ‘A recession is not inevitable, but we need to make sure we don’t talk ourselves into one. I don’t believe in managed decline. And I won’t accept it. I believe in hope over fear.’

Business Secretary Kwasi Kwarteng, who has been tipped to serve as Miss Truss’s chancellor, is expected to look at raising the basic rate threshold of £12,570 and the 40 per cent higher rate threshold of £50,270.

Business Secretary Kwasi Kwarteng is expected to look at raising the basic rate threshold of £12,570 and the 40 per cent higher rate threshold of £50,270

He will also consider bringing forward a planned 1p cut in the basic rate of income tax, which is not due to come in until 2024.

The Treasury has drawn up proposals for a temporary cut in the headline rate of VAT by either 2.5 per cent or 5 per cent from its current rate of 20 per cent. A campaign source declined to comment in detail but said ‘nothing is off the table in terms of support’.

However, another source said Miss Truss had ‘ruled out’ further universal discounts to energy bills. Boris Johnson considered cutting the headline rate of VAT earlier this year, but the measure was blocked by Mr Sunak.

Economist Patrick Minford, whose work has been cited by Miss Truss, yesterday backed a VAT cut to head off a recession.

Sources said the leadership frontrunner has all but ruled out adding to the universal £400 energy bill discount agreed by her rival Rishi Sunak earlier this year.

He told Times Radio: ‘This crisis is triggering households to cut consumption and causing recession. It is important for fiscal policy to move against that, which is why it makes sense to cut VAT or income tax. But VAT can be done more quickly.’

However, another ally of Miss Truss said that the measure was ‘badly targeted’, adding: ‘The big problem people have is with energy bills and food costs.

‘Energy only has a 5 per cent VAT rate and food doesn’t attract VAT at all.’

Allies of Mr Sunak yesterday warned that a cut to VAT would be ‘incredibly regressive’, helping the better off far more than the poor.

Former Cabinet minister Simon Hart, who is backing Mr Sunak, warned that the crisis needed concerted action to tackle inflation rather than short-term tax cuts.

He said: ‘This is not going to be easy. This is not going to be resolved by just an eye-catching tax cut on day one.’

Solutions Liz could turn to as Prime Minister 

CUTTING VAT 

Proposal: The Treasury has drawn up options for a temporary cut in VAT of 2.5 or 5 per cent.

Pros: The move would cut inflation in the short term and deliver an immediate boost to both household incomes and the economy, helping to stave off a recession.

Cons: Expensive, at a cost of up to £30billion. Critics point out that energy and food bills attract little or no VAT bill.

RAISING INCOME TAX THRESHOLDS 

Proposal: Plans to raise both the tax-free personal allowance and the threshold at which people start paying 40 per cent tax.

Pros: Would bring an early end to Rishi Sunak’s four-year freeze on thresholds, would prevent millions of people being forced to pay a high proportion of their income in tax. With inflation at more than 10 per cent it is hard to justify continuing the freeze.

Cons: Would deprive the Treasury of a huge windfall which could be used to fund other support measures.

Tax cuts are being considered to stave off a recession, which Miss Truss insisted yesterday was ‘not inevitable’

CUTTING THE BASIC INCOME TAX 

Proposal: Bring forward a 1p cut in the basic rate, which is not due until 2024.

Pros: Would put immediate cash in the pockets of 27 million people who pay income tax and is in line with her approach of allowing people to keep more of their cash.

Cons: Mr Sunak has argued cutting income tax now would fuel inflation, leaving everyone worse off in the long-run.

DIRECT HELP WITH BILLS THIS WINTER 

Proposal: The Treasury has put forward a range of proposals for helping the worst off this winter.

Pros: Measures such as raising the pensioners’ winter fuel allowance and increasing universal credit would directly target those people on ‘fixed incomes’ who need the most help.

Cons: Does nothing for those on middle incomes. Chancellor Nadhim Zahawi warned this weekend people on £45,000 salaries may need help – well above the level for claiming universal credit.

ENDING VAT ON ENERGY BILLS 

Proposal: Allies of Miss Truss are urging her to borrow Mr Sunak’s plan to scrap the 5 per cent VAT on energy bills.

Pros: Would use Britain’s post-Brexit freedoms to offer everyone savings of around £170 a year.

Cons: Cutting VAT would be difficult in Northern Ireland, where EU rules still apply. The £170 cut is relatively modest when the energy price cap has soared to £3,549.

 

Source: Read Full Article

The post Liz Truss plans to hike income tax thresholds appeared first on celebritynewsapp.com.

You Might Also Like

The Worst Celebrity Tattoos

Elon Musk has set up sleeping quarters in Twitter’s San Francisco office – Forbes 

Amouranth broke the 6 million follower mark on Twitch

Belle Delphine leaks: What’s behind the angelic face

Bhad Bhabie: How Nudes Turned A Rapper Into A Millionaire

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.
[mc4wp_form]
By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
Robin Deberry August 29, 2022
Share this Article
Facebook TwitterEmail Print
Share
Previous Article Not a witch-hunt, but a much needed inquiry
Next Article Pilots suspended after coming to blows in cockpit mid-flight
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Latest News

Celebrating January 24 Birthdays: A Look at Famous Figures Born on this Day
Celebrities January 24, 2023
Keeping Up with Celebrity Scandals: A Look at the Top Websites for Gossip and News
Celebrities January 18, 2023
PR Movies: A glimpse into the world of celebrity
Movies January 2, 2023
10 Famous Women Who Have Openly Talked About Their Mental Health Problems
Celebrities December 22, 2022

You Might also Like

The Worst Celebrity Tattoos

December 9, 2022
World News

Elon Musk has set up sleeping quarters in Twitter’s San Francisco office – Forbes 

December 7, 2022
World News

Amouranth broke the 6 million follower mark on Twitch

November 22, 2022
World News

Belle Delphine leaks: What’s behind the angelic face

November 14, 2022
//

A celebrity is a person who works hard all of their life to become well known, and then wears dark glasses to avoid being recognized – Fred Allen

Top Categories

  • Home
  • Beauty
  • Celebrities
  • Fashion
  • Lifestyle
  • Movies
  • Sport
  • World News
  • Contact

Contact Us

If you have any questions you can contact us by email

Email: info@celebritynewsapp.com

Celebrity NewsCelebrity News
Follow US

© 2022. All Rights Reserved.

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?