Jeremy Hunt considers major benefits squeeze to help slash inheritance tax
The head of government finances has cautioned that tough choices must be taken in order to "reshape the welfare system." He is considering the implementation of divisive tax reductions in the upcoming autumn announcement.
The news reports have suggested that Jeremy Hunt is considering reducing the inheritance tax and business levies. However, Mr. Hunt has stated that he believes it will not be an effortless task to decrease the overall tax burden.
The Institute for Fiscal Studies think tank reports that tax rates are currently at their highest in 70 years. Rishi Sunak, who is responsible for the country's finances, is facing increasing demands from the right wing of the Conservative party to lower taxes before the next general election.
There are reports that Mr Hunt is mulling over a substantial reduction of benefits to trim expenses in the statement that will be released next Wednesday. This move will effectively decrease welfare payouts for millions of working-age individuals.
During his talk in Milton Keynes last Saturday, Mr. Hunt stated that there is no simple solution to lowering the tax load.
We must make tough choices to improve the welfare system.
Is it possible for the chancellor to bring a sense of positivity? Tune in to Sky News to see the autumn statement broadcasted live starting at 11am on Wednesday.
Normally, government officials increase benefits for people who are of working age by using the inflation rate from September. This would result in a rise of 6.7%.
However, the chancellor has not completely rejected the possibility of utilizing the data from October instead, resulting in an increase of 4.6%.
According to experts in economics, this would result in a reduction of £3 billion in spending, which would mainly affect households that receive benefits based on their income or disability.
This decision is likely to invite disapproval because it appears to favor the rich, while many others are grappling with the high expenses of daily life.
The ex-chancellor who belongs to the conservative political party, Lord Clarke, expressed that there are voters that will see it as extremely disagreeable.
Reducing the amount of inheritance tax, which is currently set at 40% for estates worth over £325,000 plus an additional £175,000 for a primary residential property inherited by direct descendants, would only benefit a limited portion of society.
Only a mere 4% of the deaths that occurred in the year 2020/21 received any form of payment.
The Times reported that there are different possibilities for reducing the tax, like decreasing it by 50%, 30%, or 20%.
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Our plan is to implement reductions in taxes.
Mr Hunt suggested that there will be cuts made in the UK, stating that the economy has reached a crucial moment of change.
In an interview with The Telegraph, he stated that there is an approach to lessening the tax load, and a government led by Conservatives will adhere to that strategy.
According to reports, the Conservative Party may promise to eliminate inheritance tax completely before the upcoming election.
The Institute for Fiscal Studies has predicted that the tax revenue could increase to over £15bn by 2033, despite an initial cost of £7bn per year.