UK PM Liz Truss could announce new tax cuts which will boost take home pay for UK’s top earners as well as for the middle and lower income groups. The prime minister may bring in new rules that would see the basic rate threshold rise to £80,000, according to iNews UK.
Truss was chosen as UK’s 56th prime minister and Conservative Party leader on Monday. She won 57.4% of the votes polled and defeated Rishi Sunak by 20,927 votes.
People familiar with the developments told iNews UK that Truss will cancel the 40% tax threshold at £50,270 which was put in place by Rishi Sunak, her fellow contender and raise it by £30,000. This means UK citizens earning between £12,570 and £80,000 will pay 20% tax on their earnings.
People earning less than £12,570 will be exempt from paying income tax. If announced by the Truss-led cabinet, which is yet to be picked, the tax cut means three million people will no longer pay higher tax rates.
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For UK households which are bracing for a winter amid an energy crisis, it would save £3,000 a year but for people who earn above £80,000, they would save £6,000 a year.
People familiar with the developments told iNews UK that the documents for the possible tax-cutting measures were prepared by present chancellor to the exchequer Nadhim Zahawi. The aforementioned people said that the plan went down well within the Truss camp.
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The strategy by the Truss camp is among the wider list of strategies to help households as energy prices are likely to rise in the coming winter. Truss is also planning a £100billion package to freeze energy bills to help households brace better for the harsh winter ahead.
Ahead of being elected prime minister, Truss said she would take steps within one week to address issues concerning the nation. “It will take a week to sort out the precise plans and make sure we are able to announce them. That is why I cannot go into details at this stage,” Truss told the BBC last week when asked what steps she would take to address the economic challenges facing the UK.
Her steps are being seen with caution within the Conservative Party. Some Tory politicians have warned that the idea of low taxes would fall into disrepute if things go wrong and said her plans could fuel inflation while also pushing up interest rates.
However, she will be forced to deliver on the economy and cost-of-living crisis, as more than 70% of people surveyed by YouGov feel that the economy should be the main issue that the new prime minister should be focusing on.
(with inputs from iNews UK, Financial Times and Sky News)
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