LSCA Business
Do people really want tax cuts if that means poorer public services?
Andrew Lloyd, LSCA Past President and Tax Partner at RSM, considers the signals being sent out by the Chancellor of the Exchequer over his future tax plans. Having weathered the storms whipped up when he broke key tax commitments from the Conservative party’s 2019 manifesto, it is hardly surprising that the Chancellor is signalling now which taxes he plans to cut, and by how much, before the 2024 election.
the abolition of the 45 per cent top rate of income tax.
Three possibilities are being talked about.
At one level this makes perfect sense. The tactic holds out the prospect of jam tomorrow for an electorate which is weary of restrictions and hardships, and hungry for some good news. More specifically, it may mollify voters whose trust has been shaken by a range of unforced errors and
First, a 1 per cent cut in the basic rate of income tax to 19 per cent in 2023/24, followed by a further 1 per cent cut to 18 per cent in 2024/25. This might even be accompanied by
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Second, an increase in the inheritance tax threshold. Third, a reduction in VAT on energy from renewable sources.
