Jeremy Hunt has announced the 2024 spring budget will be delivered on March 6.
The Chancellor made the announcement this morning amid rumours he is planning a raft of tax cuts designed to rescue Tory election hopes.
Mr Hunt is said to be looking at scrapping inheritance tax (IHT) and reducing the basic rate of income tax alongside a change to thresholds under plans for a ‘gear change’ ordered by the Prime Minister.
At the same time Housing Secretary Michael Gove suggested that the Conservatives will promise to cut the up-front cost of a home for first-time buyers in a pre-election giveaway.
Measures said to be on the cards include Government support for longer fixed-term mortgages to reduce the size of deposits and a resurrected help-to-buy scheme.
The measures could come in the March Budget or be included in the Tory election manifesto for a vote due to take place this year.
The Chancellor made the announcement this morning amid rumours he is planning a raft of tax cuts designed to rescue Tory election hopes.
The Chancellor is said to be looking at scrapping inheritance tax (IHT) and reducing the basic rate of income tax alongside a change to thresholds under plans for a ‘gear change’ ordered by the Prime minister.
The Chancellor has commissioned the Office for Budget Responsibility (OBR) to prepare an economic and fiscal forecast to be presented to Parliament alongside the budget next year, the Treasury said.
The Telegraph said senior figures in No 10 were considering a handful of major tax cuts as Mr Sunak comes under continued pressure from Tory MPs.
Cutting inheritance tax, in a move that would benefit the wealthy, would likely create a dividing line with Labour, which is unlikely to support such a cut.
Some Conservatives have however expressed opposition to the measure as most people suffer the burden of elevated costs after a sustained period of high inflation.
Mr Hunt shelved plans to slash inheritance tax in the Autumn Statement last month.
The Chancellor had been considering whether to halve the 40 per cent rate of the duty – also known as ‘the death tax’.
The levy has been called the most hated tax in Britain, even though only 4 per cent of people are subject to it.
But thanks to rising house prices and a greater desire to transfer wealth between generations, more people are being dragged into its orbit.
Economic forecasters at the Institute for Fiscal Studies say that up 12 per cent could be paying it within a decade.
The levy is charged at 40 per cent for estates worth more than £325,000, with an extra £175,000 allowance towards a main residence if it is passed to children or grandchildren.
Couples can combine their allowance, allowing transfers of up to £1 million tax-free.
Abolishing inheritance tax would cost about £7 billion a year, but cutting income tax by 2p in the pound would cost £13.7 billion a year. Such changes will be at the forefront on Mr Sunak’s mind as he plans for a 2024 election.
Officials had expected Mr Sunak to wait until the last moment before calling an election to give his party as much time as possible to turn the polls around.
But a National Insurance cut set to come into force next month, followed by further tax cuts expected in the spring Budget, could give enough momentum to the Tories to spur the Prime Minister into calling a May election.
Labour shadow financial secretary to the Treasury James Murray said: ‘This is a desperate briefing from a desperate prime minister who is spending his Christmas break trying to keep Tory MPs on side.
‘There have been 25 Tory tax rises since the last election. Now at a time when families across Britain are struggling with the cost of living and our NHS is on its knees, Rishi Sunak is trying to buy off his backbenchers with an unfunded tax cut for millionaires.’
The Times said that ministers are considering Government support for longer fixed-term mortgages to reduce the size of deposits for first-time buyers.
A resurrected help-to-buy scheme was also said to be on the table for the spring budget or the Conservative election manifesto.
Asked by the Times whether the Conservatives would be able to go into the election expected next year promising more help for first-time buyers, Mr Gove said: ‘Oh, yes, we must. Definitely.’