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Autumn Statement live: Chancellor Jeremy Hunt to cut National Insurance

Chancellor Jeremy Hunt is expected to announce a cut to National Insurance during his Autumn Statement
Chancellor Jeremy Hunt is expected to announce a cut to National Insurance during his Autumn Statement Credit: Kirsty O'Connor/HM Treasury

Jeremy Hunt is expected to announce a cut to National Insurance in a boost for 28 million people when he delivers his Autumn Statement this afternoon. 

The headline rates of the levy are expected to be reduced as the Chancellor also unveils what is due to be the biggest business tax cut in half a century. 

Mr Hunt will tell MPs in the House of Commons that the Tories will “reject big government, high spending and high tax because we know that leads to less growth, not more”. 

The Chancellor will insist that his plan for the economy can deliver growth and reduce the national debt. 

He will say: “Our plan for the British economy is working. But the work is not done. Conservatives know that a dynamic economy depends less on the decisions and diktats of ministers than on the energy and enterprise of the British people.”

You can follow the latest updates below and join the conversation in the comments section here

Pound treads water ahead of Chancellor's speech

The pound was little changed as markets wait to see what Jeremy Hunt will announce in his Autumn Statement.

Sterling remains above $1.25 and was flat against the euro, which is worth 87p.

Reform UK leader claims Tories in ‘panic’ mode

Richard Tice, the leader of Reform UK, claimed the Tories had decided to cut tax at today’s Autumn Statement after seeing his party’s position in recent opinion polls. 

Mr Tice told GB News: “The reality is, a week ago we were being told there was no room for tax cuts and the reality is they saw Reform UK going up in the polls, four double digit polls for the first time. 

“P for panic has descended into Downing Street. All of a sudden they have found tens of billions behind the sofa. Where has that come from I wonder? All of a sudden it is all about tax cuts here,  business tax cuts there.” 

Mr Tice welcomed the prospect of tax cuts but described the timing of the move as “cynical, pre-election gambling”.

Autumn Statement to provide the answers... to Telegraph Puzzles

The Chancellor will be hoping his Autumn Statement inspires support for the Conservatives ahead of the next election.

As a first small step, he can take comfort from the fact his fiscal event has inspired the team at Telegraph Puzzles.

Today’s challenges are themed on the Autumn Statement. Click on the links to play our hugely popular PlusWord, our Mini Crossword and the US-style Cross Atlantic crossword.

Tax giveaways ‘too little, too late’, says Labour frontbencher

Labour’s Darren Jones said tax giveaways at today’s Autumn Statement would amount to “too little, too late” from the Tories. 

The shadow chief secretary to the Treasury told Sky News: “Thirteen years of Conservative economic failure. 

“People know at home on every measure - inflation, cost of living, national debt, tax, the direction the country is going in - the Tories have failed and they are just not going to be able to turn it around at this stage.”

Bond markets shaky ahead of Autumn Statement

All the talk of tax cuts is creating some nervousness in the bond markets, where Government borrowing costs are ticking higher.

The yield on benchmark 10-year UK gilts has climbed to 4.15pc. The yield is the return that the Government promises to pay buyers of its debt.

Stock markets are in a much better mood, with the FTSE 100 up 0.1pc and the FTSE 250 rising 0.4pc.

Victoria Scholar, head of investment at Interactive Investor said: 

With the Conservatives lagging in the polls, a looming general election, Rishi Sunak achieving his goal of halving inflation ahead of schedule, and the UK’s public finances in a better position than expected, the Treasury is anticipated to unveil some vote-winning tax cuts today.

This marks a change from recent fiscal policy with the government until now refraining from tax cuts and keeping a lid on spending where possible in order to support the Bank of England in its attempts to tame inflation.

She said areas to watch include reforms to pensions as well as possible changes to ISAs, plus inheritance tax and stamp duty. 

Labour downplays impact of expected National Insurance cut

Labour claimed a National Insurance cut at today’s Autumn Statement would make only a small difference to families who have seen their tax bills rise in recent years. 

Darren Jones, the shadow chief secretary to the Treasury, told Sky News: “We welcome the suggestion there will be a tax cut for working people. We have been calling for that in the Labour Party for some time. 

“But the fact of the matter is that on average people are paying £4,000 more a year in tax under the Conservatives. So a couple of hundred quid off a year will be good but they are still going to be down £3,500 a year.

“And at a time when the Government is taking more money from us than ever before, people at home will be asking, well, what am I getting for that money when public services are on their knees and the economy is not heading the right direction.”

Change inheritance tax thresholds, Chancellor urged

The Treasury’s inheritance tax income has boomed after tax-free thresholds were frozen at their 2020/21 rate for seven years, rather than being adjusted in line with inflation.

Sara McGrigor, partner in the private client team at City law firm DMH Stallard, said Jeremy Hunt can do some tinkering with the numbers that would help people when it comes to inheritance without impacting tax-take too heavily.

She said:

There’s been plenty of speculation about inheritance tax in the lead up to the Autumn Statement.  

I’d encourage the Chancellor to make a change to the availability of the Residence Nil Rate band to allow people without children/direct descendants to claim. 

He could also consider increasing the thresholds for the main IHT Nil Rate Band, which have been frozen since 2009.

Both of which would provide people with significant savings without a change of rate.

Pictured: Sir Keir Starmer leaves his London home ahead of Autumn Statement

Sir Keir Starmer, the Labour leader, is pictured this morning leaving his London home ahead of the Autumn Statement Credit: GoffPhotos

National Insurance cut less painful for Treasury, says economist

Economist Julian Jessop has set out some of the rationale behind the Chancellor potentially choosing to cut National Insurance payments rather than reducing income tax in his Autumn Statement:

Lib Dem leader fears 'huge deception' on tax from Chancellor

Sir Ed Davey said he feared Jeremy Hunt will offer a “huge deception” on tax at the Autumn Statement today. 

The leader of the Liberal Democrats said that an expected cut to National Insurance would not “hit the sides” when compared to the impact of income tax thresholds having been frozen in recent years. 

Asked if he would support a cut to National Insurance, Sir Ed told Times Radio: “I fear we are going to hear a huge deception on tax from the Chancellor today. 

“There may be some small relief but set aside the massive tax rises that people are going to be paying in the next few years, it will be nothing. 

“A typical middle-income household has been, this year, paying an extra £2,000 in income tax, the way that they have frozen that tax-free sum that we all get from income tax. 

“Normally it goes up by inflation. They are not allowing that to rise by inflation as always happened in the past. That is dragging millions of people into both the normal tax band and the higher rate tax band. It is really hitting loads of people and anything he says today I don’t think is going to hit the sides.”

UK markets rise ahead of Autumn Statement

UK markets have risen in early trading ahead of the Chancellor’s Autumn Statement, which aims to deliver tax cuts to boost business investment.

The FTSE 100 has gained 0.2pc in to 7,497.40 while the midcap FTSE 250, which is more focused on the domestic economy, has risen as much as 0.4pc to 18,420.48.

Working from home not the answer to welfare reforms, warns Citizens Advice boss

The Chancellor’s expected welfare reforms in the Autumn Statement could come unstuck if they focus on pushing more unemployed people to work from home, according to the boss of Citizens Advice.

Dame Clare Moriarty said that coverage ahead of the Chancellor’s expected welfare reforms had put “much more emphasis on the stick than the carrot” to get people back into work.

She warned there are not enough vacancies suitable for working from home, adding “it is much easier to take payments away from people than it is to build that supporting infrastructure that enables people to get back into work”.

She told BBC Radio 4’s Today programme:

The rationale that people can work from home doesn’t seem to match up with the vacancies.

Of the 150,000 vacancies on the DWPs own find a job website only 5pc of them are suitable for home working so we are concerned that we will see more people that come into a sanctions regime which the DWPs own evidence shows doesn’t actually help people get back into work.

Starmer claims Tories are ‘party of high tax and low growth’

Sir Keir Starmer claimed the Tories are the “party of high tax and low growth” as he took aim at Rishi Sunak and Jeremy Hunt ahead of the Autumn Statement.

The Labour leader argued that his party is now the “party of fiscal responsibility” and the “party of business”. 

He said that after 13 years of the Conservative Party in power “working people are worse off”.

Tory MP calls for tax cuts, fiscal responsibility and business boost

Stephen Hammond said he wanted to see three things at today’s Autumn Statement. 

The Tory MP told Sky News that he wanted to see fiscal responsibility, tax cuts and action to “boost business”. 

He said: “I want to see three things really. I want to see that we have shown that we can run the economy fiscally responsibly… I want to see, if there is room for tax cuts in terms today then I want to see something that benefits more people and National Insurance does that, or you could have moved some of the lower thresholds. 

“And the one thing that you will know that I wrote something on over the weekend was actually ensuring that we boost business.”

Six pre-election tax giveaways, and what happened next...

With the Conservatives facing an uphill battle in the next general election, all eyes will be on Jeremy Hunt as he delivers his Autumn Statement.

Benedict Smith looks at how previous chancellors have been generous when elections have loomed – with mixed results:

The Chancellor will be under pressure to show he can deliver anticipated tax cuts as well as a compelling reason for voters to back the Tories against a resurgent Labour Party.

Not all pre-election giveaways have seen the governing party returned to power: think back to the 1996 budget, which failed to stem an exodus of voters to Labour. 

However, public-pleasing giveaways have helped to rejuvenate a party worn out by multiple terms in office and, in some cases, delivered an unexpected victory. Rishi Sunak will need both.

Take a look at how six pre-election giveaways worked out.

Budgets tend to loosen up when polling day looms: (left to right) Mr Osborne, Mr Brown, Mr Lamont and Mr Lawson

Reeves: Autumn Statement won't change Government's 'appalling record'

Rachel Reeves, the shadow chancellor, claimed that nothing Jeremy Hunt announces this afternoon “can change the Government’s appalling record” on the economy. 

Ms Reeves will respond to the statement for Labour in the House of Commons. She will immediately follow Mr Hunt’s address.  

She tweeted this morning: 

Senior Tory MP: Hunt has £20bn of headroom for giveaways

Harriett Baldwin, the chairwoman of the Treasury Select Committee, said frozen income tax thresholds had resulted in the Government generating more in tax than previously anticipated over the last 12 months. 

The senior Tory MP told GB News that as a result Jeremy Hunt has about £20billion of headroom and he can now “give some of that back” in the form of tax cuts. 

Hailing today’s Autumn Statement as a “turning point”, Ms Baldwin said: “We think that there is probably about £20billion of headroom. And that is because you and I through those frozen tax levels and also businesses we have actually ended up paying more tax this year than was planned in last year’s Budget.

“So I think that today gives the Chancellor an opportunity to give some of that back to the hardworking businesses and people of this country so that we can grow the economy more rapidly next year.”

Chancellor aims for £20bn business investment boost

Jeremy Hunt is expected to unveil measures that aim to boost business investment by £20bn a year in his Autumn Statement.

The policies aimed at growing the economy will include making permanent the 100pc tax relief that businesses gain for investing in plant and machinery.

The Chancellor will permanently extend “full expensing”, which allows companies to claim back up to 25p for every pound invested and which had been due to end in March 2026.

The Treasury said the Chancellor will announce 110 measures focused on growth, including removing planning red tape and reforming welfare.

It comes as the Treasury is on course to secure a record inheritance tax take this year as calls grow for the Chancellor to slash rates in the Autumn Statement.

Businesses need stable environment to invest, says Sage boss

The Government needs to give businesses a stable environment to invest in as well as offering tax cuts, according to the boss of FTSE 100 accounting software company Sage.

Steve Hare said “incentivising investment in technology is the number one priority” for the Chancellor’s Autumn Statement, as his company revealed annual pre-tax profits of £424m.

He welcomed suggestions that investment in plant and machinery will gain tax benefits - known as the super deduction - but said it should be extended to investment in technology like software.

He told BBC Radio 4’s Today programme: “We have done some studies and shown him all the calculations to show that we believe it would be additive to the economy because it would held small and mid-sized enterprises to grow more.”

He added that tax cuts help businesses “but you also need a stable environment”. 

“People need to confidence to make long term decisions with that confidence knowing the goal posts won’t move,” he said.

Sage Group chief executive Steve Hare wants the super deduction extended to technology like software

Sir Jacob Rees-Mogg calls for 'bonfire of taxes'

Sir Jacob Rees-Mogg has called for a “bonfire of taxes” to “ignite the British economy”. 

The former business secretary said civil service numbers should be reduced, inheritance tax should be cut, the VAT business threshold should be raised and corporation tax should be brought back down to 19 per cent. 

He told GB News that for the economy to grow the nation “needs taxes at the right level that don’t inhibit growth”. 

He said: “Thresholds that have been eaten into by inflation: We should do as much as we can with the money available to try and restore those thresholds. 

“That really should be a priority because that is a genuine cut in income in real terms for people up and down the country... this bonfire of taxes will potentially ignite the British economy.”

Hunt: Autumn Statement will be 'packed with ideas for long term growth'

Jeremy Hunt said the Autumn Statement will be “for growth” as he set the scene for his fiscal address with a video on Twitter published late last night. 

The Chancellor said: “Inflation has halved, the economy has turned a corner which is why tomorrow will be an Autumn Statement for growth.”

Mr Hunt said the statement will be “packed with ideas for our long term growth”.

Jeremy Hunt to announce National Insurance cut

Jeremy Hunt is expected to announce a cut to National Insurance in a boost for 28 million people when he delivers his Autumn Statement this afternoon. 

The headline rates of the levy are expected to be reduced as the Chancellor also unveils what is due to be the biggest business tax cut in half a century. 

Mr Hunt will tell MPs in the House of Commons that the Tories will “reject big government, high spending and high tax because we know that leads to less growth, not more”. 

The Chancellor will insist that his plan for the economy can deliver growth and reduce the national debt. 

He will say: “Our plan for the British economy is working. But the work is not done. Conservatives know that a dynamic economy depends less on the decisions and diktats of ministers than on the energy and enterprise of the British people.”

The scheme that could boost GDP by 0.9pc

Think tanks are urging the government to make permanent “the best idea in politics, you’ve never heard of”. 

The Centre for Policy Studies and the Adam Smith Institute are among those calling for the government to extend full expensing. The tax relief scheme, which is currently temporary, allows businesses to claim 100pc of the cost of qualifying plant and machinery in one go.

Making it permanent would incentivise investment, boosting wages by 0.8pc and GDP by 0.9pc, the CPS estimates. 

Robert Colvile, of the CPS, wrote today on X, formerly Twitter: “Jeremy Hunt has the chance to embed a really good, pro-investment policy in the tax system that gives the UK a clear international USP, and provides some desperately needed certainty on the business investment environment after years of yo-yo rates and temporary measures.”

Patriotic Millionaires call on Hunt to introduce a wealth tax

Patriotic Millionaires is a group of millionaires calling for a wealth tax to be levied against the richest in society. The UK arm of the group on 21 November projected a message onto the Treasury Building and the Bank of England calling on Jeremy Hunt to “Tax our Wealth.” 

Posting on X, formerly Twitter, the group wrote: “Dear Jeremy Hunt. Our tax system should be fair. The Autumn Statement should raise taxes on us, the super rich. We want it. The public wants it. Our country needs it. Tax our wealth and invest in a stronger, more sustainable Britain. It’s the patriotic thing to do.”

Government gives £1,800 pay rise to lowest earners

The minimum wage will rise by more than £1 an hour to £11.40 from next April.

Jeremy Hunt had already confirmed at the Conservative party conference that the minimum wage would rise over £11 in 2024. This bigger-than-expected increase will be a big boost to lower earners. Someone working full-time on minimum wage would see their pay increase by £1,800. 

Laura Suter, of stockbroker AJ Bell, said: “The move to increase the minimum wage puts more of a cost burden on businesses – while the government sets the rate, it’s businesses around the country that actually pay it. This sizeable increase might be the strongest hint yet that some tax breaks for businesses are due to be announced in the Autumn Statement – to help balance the increased costs from these rising wages.”

The tax cut that could save higher earners £5,946

Five million workers could be in for a tax cut as the Chancellor mulls raising the threshold for paying 40pc income tax. 

Raising the threshold from £50,270 to £60,000 would save a worker on £80,000 almost £2,000 in tax per year, according to calculations by tax firm RSM. The same individual would save close to £6,000 if Jeremy Hunt increased the threshold to £80,000. 

For higher earners, this would be far bigger tax cut than a 1 percentage point reduction in the basic rate of income tax, which would save a £80,000 earner £377 and £324 for someone earning £45,000.

However, there is way that the government could dilute the impact of an increase in the higher rate threshold. Matthew Todd of RSM said the Chancellor may be tempted to raise the threshold not just for paying 40pc income tax but also for National Insurance Contributions. “This would mean that the tax savings, which would only be felt by those earning over £50,270, may not be as significant as they may first seem for employees and the self-employed,” he said. “The income tax saving would likely be reduced by an increased NICs burden of 10pc (for employees) or 7pc (for the self-employed).”

Raising both thresholds to £60,000 would see a worker on £80,000 save £974, while raising it to £80,000 would save them £2,974 – significantly less than if the higher rate income tax band alone was increased. 

Under current government plans, the number of people paying the higher or top rate of income tax will soar to 8.9 million by 2027, according to the Institute for Fiscal Studies, a think tank, because of Rishi Sunak’s decision to freeze tax thresholds for the next five years. 

Do tax giveaways really win elections?

With Jeremy Hunt under pressure to deliver tax cuts in tomorrow’s Autumn Statement, reporter Benedict Smith looks back over the pre-election giveaways of former Chancellors

Public-pleasing giveaways can sometimes help a governing party swing the vote back in their favour. However, their last-minute generosity has not always paid off. Ken Clarke cut the basic rate of income tax by a penny to 23p in the pound in his 1996 budget – but this was not enough to prevent a landslide Labour victory under Tony Blair. 

Other generous budgets have had more success. Nigel Lawson’s so-called “bribes budget” of 1987, which included cuts to income tax and petrol duty, granted Margaret Thatcher a third term in power. 

Labour voters dislike inheritance tax more than Tories do, poll reveals

Labour voters are even more likely than Conservative supporters to think inheritance tax is unfair, polling has found. 

Almost three quarters (73pc) of Labour voters think the 40pc levy is unfair, compared to 68pc of Tory voters, according to a poll by a WeThink, formerly known as Omnisis. Read the full story here

On Sunday, Rachel Reeves said slashing inheritance tax was “not the right thing to do now”. However the Shadow Chancellor refused to clarify whether a tax cut would be reversed if Labour won the next election. 

Stamp duty cut for downsizers would be "a shot in the arm" for the housing market

In his latest column for Telegraph Money, property expert Phil Spencer writes that a stamp duty cut for downsizers could free up larger properties for young families and first-time buyers.

Two fifths of homeowners aged over 65 live in a home that is larger than they need, according to property website Zoopla. In total these older homeowners are sitting on 10 million spare bedrooms. 

“Personally I think this is the space where the Government could make a difference,” Mr Spencer writes. “We have got to find a way of incentivising people to move out of the four or five bedroom homes they no longer need.”

Credit: Andrew Crowley for the Telegraph

Hunt handed £17bn borrowing boost

The government has borrowed £16.9bn less than official forecasts predicted so far this year, delivering a boost to Jeremy Hunt ahead of the Autumn Statement.

Soaring tax revenues meant the government borrowed billions less than the Office for Budget Responsibility predicted in March. 

The numbers, released today, give the Chancellor more room to cut taxes tomorrow, writes our economics editor Szu Ping Chan. 

National Insurance cuts could save the average worker £450 a year

The government’s plans to cut National Insurance could save the average worker £450 a year, according to new analysis. 

In a speech on Monday, the Prime Minister, having fulfilled his pledge to halve inflation, signaled it is now time to slash personal taxes. 

His remarks have fueled speculation that the Chancellor will announce a cut to income tax or national insurance in tomorrow’s Autumn Statement, with some considering the latter more likely. 

Analysis by the investment firm Quilter shows that a 1 percentage point cut to National Insurance would save the average worker earning £34,963 a yearly sum of £224, or £448 if the rate was reduced by 2 percentage points. A worker on £50,000 would save £374 or £749 respectively.  

Bringing down National Insurance rates would ease the tax burden for lower and middle earners. Currently workers pay National Insurance at a rate of 12pc of their weekly earnings between £242 and £967 (or between £12,570 and £50,270 a year). They then pay contributions of 2pc on any earnings over this threshold.

Inheritance tax raises £4.6bn in April to October

Families have paid an extra £500m in inheritance tax this year due to the freeze on tax thresholds, according to official statistics. 

Timely figures published on the eve of the Autumn Statement show that the Treasury raked in £4.6bn from April to October, half a billion more than in the same period last year. 

Carla Morris, of wealth manager RBC Brewin Dolphin, said: “Whilst originally designed for only the wealthy to pay, the middle classes are now getting dragged into the IHT net, often unexpectedly, when they own relatively modest family homes.”

She continued: “The pressure on this government and the next to ease this burden is building.”

Tomorrow, after months of speculation, we will hear the Chancellor’s final decision on inheritance tax. 

The Telegraph has been campaigning for the government to scrap the 40pc levy, a move that would families over £7bn each year. However, Jeremy Hunt may instead choose to unfreeze the tax-free allowance or reduce the punitively high tax rate. 

Jeremy Hunt to allow workers to choose their own ‘pot for life’ pension

The Chancellor is set to announce pension reforms that will give British workers a “pot for life”.

The measures, expected tomorrow, will give savers the right to nominate the pension scheme their employer pays into, rather than joining their employer’s default arrangement. 

A Treasury source told the Financial Times: “Helping people keep the same pension pot will stop billions of pounds being needlessly lost and make sure tomorrow’s pensioners benefit from every penny they save.”

Money reporter Madeleine Ross has the details here

MPs call on Hunt to deliver Thatcherite tax cuts

MPs are urging Jeremy Hunt to follow in the footsteps of Margaret Thatcher’s Chancellor, Nigel Lawson, and announce major tax cuts in tomorrow’s Autumn Statement. 

Posting on X, formerly Twitter, this morning, John Redwood, Conservative MP for Wokingham, wrote: 

“Margaret Thatcher cut income tax from 33pc to 25pc and corporation tax from 52pc to 35pc. The top rate of income tax fell to 40pc. Tax revenues rose. Look forward to the government copying some of that.”

Chancellor Jeremy Hunt is expected to announce tax cuts after discovering he has more fiscal headroom than expected. It emerged today that Britain borrowed less than its budget forecaster predicted in the financial year to October. 

Chancellor to unveil workplace pensions shake up and tax cuts

Good morning. It’s Autumn Statement eve and the papers are full of policy predictions ahead of tomorrow. Most expect Jeremy Hunt to announce tax cuts after official figures showed borrowing came in below estimates in the first seven months of the financial year.

The Telegraph leads on a ‘Thatcherite tax-cutting package’ reducing the tax burden on workers and businesses. The Prime Minister has been considering plans to cut National Insurance, raise the 40 per cent income tax threshold and reduce inheritance tax between now and the general election, writes political editor Ben Riley-Smith. 

Elsewhere, here are the other headlines driving the conversation this morning:

  • Pensions shake up: An expected pensions shake up will see the Chancellor introduce a “pot for life” allowing consumers to combine their savings for later life, according to the Financial Times. Under the current system, of workplace pensions, workers who move jobs frequently collect a number of small pots which can be difficult and costly to combine.
  • National Insurance: NI is tipped as one of the front runners to be cut as Jeremy Hunt looks to reduce the tax burden, that is now the highest since world war two.
  • Income tax: More than 4 million workers will be dragged into paying income tax for the first time unless the Chancellor changes the rate thresholds, according to research shared with the Guardian by the Joseph Rowntree Foundation (JRF) poverty charity.
  • Inheritance tax: The Chancellor and Prime Minister are understood to be looking at reducing inheritance tax down from its currently level of 40pc. The move has been deemed by the Treasury to be no-inflationary.
  • Benefits clamp down: Prime Minister Rishi Sunak is to force more benefits claimants to look for jobs, as part of welfare scheme reforms set to be announced in the Autumn Statement, reports The Times. Individuals with mobility and mental-health problems will be told to look for work that they can do from home. Their benefits could be reduced by £4,680.
  • Borrowing below expectations: The Government’s borrowing is running about 15pc below forecasts made by the OBR in March, delivering a boost to Jeremy Hunt ahead of his Autumn Statement on Wednesday. The Treasury borrowed £16.9bn less than the OBR had predicted it would have done by October.

Stay with us today in the run up to tomorrow’s statement. 

 

No interest rate cut till 2025, predicts City bank

The Bank of England will not cut interest rates next year, City economists have predicted, as inflation is expected to remain persistently high.

However, money markets think that the Bank of England will begin cutting interest rates by June next year after inflation fell by more than expected to 4.6pc in October.

The decline in the pace of price rises has emboldened Rishi Sunak to say that he Government is now in a position to start cutting taxes.

However, Bank of America thinks mortgage holders will have to wait until February 2025 for a first reduction in borrowing costs, with rates to come down by a full percentage point to 4.25pc during the year.

However in a note to clients, Agne Stengeryte rates strategist Agne Stengeryte warned: “We see a tougher UK inflation outlook then the Bank of England and forecast the first cut in February 2025.”

Gove fighting for local council funding

Michael Gove has been pushing the Treasury for “appropriate funding” for local councils, ahead of the Autumn Statement.

In the run-up to the Chancellor’s Fiscal statement on Wednesday, local councils have been pushing for more funding to alleviate pressures including temporary accommodation and social care. 

Speaking at a local government conference on Monday, the Communities Secretary said he had been “doing my best to reinforce to the Treasury and to Number 10 some of the particular challenges that local government faces”, reports the Press Association. 

While Mr Gove said he was unable to reveal what was in the Autumn Statement, he told the County Council Network conference on Monday that he recognised the need for local government to have adequate resources.

Over £1.74 billion has been spent by local councils in 2002/23 in order to support 104,000 households in temporary accommodation, according to analysis from the Local Government Association. 

Gove said: “The cases that I make to other Government colleagues are predicated on the basis that local government can deliver, local government is ready to reform, but local government also needs the resource to be able to make that reform work effectively.”

Financial pressures have seen a string of local authorities effectively declare bankruptcy in recent years, including Woking, Thurrock, Birmingham and Croydon, while others have warned they may have to take similar action soon.

Our predictions for Jeremy Hunt’s announcement

Jeremy Hunt will deliver his Autumn Statement on Wednesday as pressure grows to ease Britain’s highest tax burden since the Second World War. 

Rishi Sunak, the Prime Minister, has said now inflation has halved, “we can begin the next phase and turn our attention to cutting tax”. 

There has been much discussion about how far Hunt may go in the Autumn statement to reduce the tax burden, and which levies he could target. 

Telegraph Money has pulled together a full and up to date rundown of the measures we may see in Chancellor’s Autumn Statement – from cuts to income tax, Isa reforms and changes to the state pension triple lock.

You can find the full details of what is expected this week here, written by Lauren Almeida,

Senior money reporter and James Fitzgerald, senior money reporter. 

Hunt urged to tackle ‘unacceptably poor service’ at HMRC

Jeremy Hunt has been urged to end the “unacceptably poor service” at HMRC as the taxman grapples with a year and a half-long backlog of cases.

The Association of Chartered Certified Accountants (ACCA) called on the Chancellor to accelerate plans to improve the tax office amid growing frustration about poor service and long delays.

HMRC is currently grappling with an 18-month backlog of taxpayer correspondence and mounting delays as thousands of staff continue to work from home.

Over half of ACCA’s accountants blamed HMRC for hurting the productivity of their business.

In a letter to the Chancellor, the ACCA said: “In your Autumn Statement last year, you highlighted that ‘a strong economy depends on strong public services’.

“This is as true for the role played by HMRC as other public services, yet we have seen no substantial improvements since this statement.”

The letter comes as the Chancellor makes the final changes to the Autumn Statement when he is expected to offer tax cuts as falling inflation has created economic headroom. 

Read the full story here

Autumn Statement "lesson in squaring circles"

The Chancellor must balance the financial rules he’s bound by with wider market concerns, writes Telegraph columnist and leading economist Roger Bootle. 

The good news, he says, is that the Office for Budget Responsibility (OBR) is likely to forecast this year’s borrowing to be some £16bn lower than it thought in March. 

However, he says, “ the reality is much more complicated”. 

“The gods at the OBR are difficult to please. Having under-estimated the performance of the economy this year, the OBR is likely to reduce its forecasts for 2024 and 2025, with real GDP in 2027/28 forecast to be no higher than it envisaged back in March.”

“Hunt is also bound by another fiscal rule, namely that the ratio of debt to GDP should be falling in five years’ time.”

Read his full analysis here 

The focus is now on growth, Hunt tells the CBI

Jeremy Hunt is focusing on economic growth, now the rate of inflation as halved, he told the CBI conference this afternoon. 

The Chancellor took to the stage and told business leaders he is feeling “a lot more positive about the UK economy than a year ago.”

“We can start to shake off some of the defeatism and pessimism about the UK,” he added. 

Hunt went on to discuss the Mansion House reforms to allow pension funds to invest in a wider selection of assets, saying “we’ve got the second biggest pension fund ecosystem in the world, but for various historic reasons there are too many barriers that prevent them investing in some of the biggest domestic opportunities”.

He said the UK’s productivity was 15pc lower than Germany’s, partly due to skills training - which the Government was addressing through improvements in technical education - but also because of a lack of capital investment.

“What you will see on Wednesday, without going into individual measures, there’s a whole range of measures designed to unlock business investment and close that gap with countries like France, Germany and the United States.”

 

Three key stats ahead of the Autumn Statement

There are three key statistics to bear in mind ahead of this week’s Autumn Statement, according to experts at investment platform Interactive Investor. 

  • State Pension triple lock: Pensioners are still due to have £3,261 income gap between the state pension and the level of income needed for a minimum retirement in April 2024, according to calculations by interactive investor.
  • Inheritance tax: Deep freeze on the main inheritance tax (IHT) threshold since 2009 has pushed more estates into the tax net, costing bereaved families around £107,000.
  • Fiscal drag: Low and middle earners are due to pay an extra £889 in tax by the 2027/28 tax year, when the deep freeze in tax thresholds is set to come to an end, rising to £1,967 for higher earners.

Alice Guy, head of pensions and savings, interactive investor, says: “The frozen inheritance tax threshold is the ultimate example of fiscal drag, with the threshold frozen for a staggering 14 years since 2009. This means that a tax, original intended for the very wealthy is catching more and more ordinary homeowners in the net.

“You can reduce inheritance tax liability by making use of gifting allowances, trusts and pensions (which are normally free from IHT). It is worth consulting a qualified adviser to work out the value of your estate and how much tax you might be likely to owe.”

Cuts to inheritance tax and a reduction of income tax are both understood to be under consideration as potential measures to be announced in Wednesday’s Autumn Statement. 

Prime Minister Rishi Sunak has now confirmed tax cuts are coming. Although Treasury Minister Gareth Davies earlier today told Times Radio that Jeremy Hunt won’t ‘sacrifice sound money’ for tax cuts in the fiscal statement. 

Sunak teases tax cuts and benefits reform

Rishi Sunak has teased tax cuts and benefits reform on his ‘X’ (formerly Twitter) account this afternoon. 

The Prime Minister’s post followed a speech this morning in which he confirmed tax cuts were on the cards ahead of the Autumn Statement. 

Although he would not be drawn in to specifics on which taxes may be reduced he said, “I promised you we would halve inflation. We took the difficult decisions and we have delivered on that promise. So now you can trust me when I say that we can start to responsibly cut taxes and we will now move to the next phase of our plan to grow our economy by reducing debt, cutting tax and rewarding hard work...” 

Speaking in north London he would not say which measure of inflation the Government will use to uprate benefits in April next year. However, he said the welfare system “should be compassionate, it should be fair and it should be sustainable”. 

DWP notice sparks benefits debate

Amid swirling rumours of cut tax, many are also keeping an eye on any clues that could point to the governments plan for benefits.

Former pensions minister Steve Webb has flagged a notice from the Department of Work and Pensions that it will be releasing an ‘ad hoc’ publication on benefit upratings on Wednesday - the day of the Autumn Statement. 

Adding, ‘Looks like this will be their defensive doc, justifying using the more recent inflation figure.’

Webb is suggesting that although benefits are usually increased by September’s inflation figure (6.7pc) - the same as the figure used to determine the triple lock - the government may instead only increase benefits by October’s figure (4.6pc). The document would be used to justify the decision. 

However, Alex Clegg, economist at the think-tank The Resolution Foundation, says a similar document was published last year and the notice may not suggest a change in method but just new procedure. Clegg said the document may even be used to frame a 6.7pc uplift as generous, if the government commits to September’s inflation figure. 

If the government were to use the October’s inflation measurement to uprate benefits, rather than September’s, it would be a real terms cut to the amount received by claimants. 

Last week the Chancellor announced that unemployed benefits claimants who refuse to look for a job will be stripped of their right to free prescriptions and discounted bus travel.

Tory Mayor calls for tax cuts in the Autumn Statement

Andy Street, the Conservative mayor for the West Midlands, has called on the Chancellor to ‘use his headroom wisely’ at the upcoming Autumn statement. 

Street, who appeared on the BBC’s Sunday morning show, says he is looking for a chance to put money in to people’s pockets and would like to see incentives for business investment. 

When pushed he suggested a cut to National Insurance would put spending power in people’s pockets. 

He is the latest Tory politician to call for tax cuts following the news last week that inflation has halved, giving Jeremy Hunt more room to maneuver in Wednesday’s fiscal statement. 

The taxes Jeremy Hunt could cut

Following his weekend interview with Chancellor Jeremy Hunt, the Telegraph’s political editor Ben Riley-Smith reviews what are the options being looked at and which are the most likely to be announced. 

The Chancellor made clear that now was the time to show the public there was a “path” to low taxes.

But the message is nuanced and caveats exist. On Sunday, with speculation rampant about which tax cuts are coming, Mr Hunt urged caution on scale: “Rome wasn’t built in a day.”

The Chancellor has set guidelines on which tax cuts he will consider. Firstly, they must not fuel price rises. Inflation is still 4.7 per cent, higher than the 2 per cent target.

Secondly, they cannot be paid for by borrowing. And thirdly, they must help with the stated ambition for this Wednesday’s Autumn Statement: Boosting long-term economic growth.

National insurance, income tax and inheritance tax are all reported as being under consideration for cuts, with inheritance tax widely considered one of the most likely options. 

Read the full analysis here

The Chanchellor was on the Sunday politics news programmes ahead of the Autumn Statement Credit: Jeff Overs/BBC/PA

 

Q&A: Our tax expert answers your questions ahead of the Autumn Statement

There is still time to put your tax question to our expert Mike Warburton at his live Q&A. 

Mike was previously a tax director with accountants Grant Thornton and has (unofficially) advised chancellors and senior business leaders. He is now retired and writes The Telegraph’s weekly tax advice column.

Whether you have a question about the upcoming Autumn Statement, or if you have any general tax-related queries, please leave it in the comments section below the live blog for Mike to answer - just look for the speech bubble icon underneath the first post of the day.

Follow the Q&A here

Prime Minister hints tax cuts on the way

Sunak finally shifts economic debate and lights fuse on tax cut speculation

Today’s speech by Rishi Sunak represented a turning point for the Government and a significant shift on the wider economic debate, writes politics live blog editor Jack Maidment

After months of sticking doggedly to the same line of emphasising the importance of halving inflation and dismissing questions about tax cuts, the narrative has now officially changed. 

The Prime Minister confirmed that tax cuts are on the way but perhaps understandably would not be drawn directly on what exactly could be cut first. 

However, there was a clue. 

Mr Sunak did stress that his focus would be on the “supply side” of the economy which would suggest that business tax cuts rather than personal tax cuts could be prioritised at the Autumn Statement on Wednesday. 

The premier said any tax cuts will be implemented in a “serious, responsible way” and he stressed that “we can’t do everything all at once”, speaking in north London this morning.

He said: “My argument has never been that we shouldn’t cut taxes, it’s been that we can only cut taxes once we have controlled inflation and debt. First cut inflation, then cut taxes. And that is why I made the promise to halve inflation and the official statistics show that promise has now been met.”

The PM’s comments will now spark 48 hours of frenzied speculation about where Mr Hunt will target his economic pain-relief.

Prime Minister Rishi Sunak gives a speech on the economy in north London this morning Credit: Getty Images/WPA Pool

Last chance to email our tax expert with your questions

Don’t forget to email us with your tax questions ahead of our Q&A with tax expert Mike Warburton at 12pm. 

Previously a tax director with accountants Grant Thornton, Mike is now retired and writes The Telegraph’s weekly tax advice column. Most recently he advised a reader with a property query about a second home

Whether you have a question about the upcoming Autumn Statement, or if you have any general tax-related queries, please email your questions now ahead of the Q&A at midday to Mike: taxhacks@telegraph.co.uk. 

Or use the comment section on the link below to ask your tax questions. Just look for the speech bubble icon underneath the first post of the day.

Join the event online at 12pm 

The Telegraph's tax expert Mike Warburton Credit: John Lawrence/TMG John Lawrence

 

Autumn Statement morning round up

Good morning. The weekend papers were full of policy predictions and stories ahead of the Autumn Statement on Wednesday.

Chancellor Jeremy Hunt sat down for an interview with Telegraph political editor Ben Riley-Smith in which he gave the clearest indication yet of tax cuts to come/ 

Hunt hailed a “turning point for the economy”, saying “this is the moment” to focus on growth. Read the full interview here.

There are plenty of Autumn Statement headlines flying around so here’s a quick round up: 

  • Hunt rules out any tax cut that would fuel inflation: Hunt told  News’ Sunday Morning programme “The one thing we won’t do is any kind of tax cut that fuels inflation. We’ve done all this hard work. We’re not going to throw that away.” But did say “Everything is on the table in an autumn statement.”
  • Treasury minister: Hunt won’t ‘sacrifice sound money’ for tax cuts: Gareth Davies was asked during an interview on Times Radio if the tax burden will be lower by the end of the week. But he refused to be drawn as he said the “principles of sound money” would not be “sacrificed” by Mr Hunt for tax cuts.
  • Financial Times urges Hunt to avoid ‘short-termism’ in the Autumn Statement: ‘The UK needs a disciplined statement that sets out a plan to lift its long-term growth potential,’ wrote the paper’s editorial board. While recognising there is more economic headroom, the Board added ‘the fiscal situation remains tight.’
  • Sunak to deliver speech on state of the economy mid-morning: Rishi Sunak will deliver a speech on the state of the economy this morning as he sets the scene for the Autumn Statement on Wednesday.  
  • Labour demand clarity over future of winter fuel payments: Labour’s shadow chief secretary to the Treasury Darren Jones has written to Jeremy Hunt seeking clarity over the future of universal winter fuel payments. The letter was promoted by the Telegraph’s story about comments made by John Glen as he questioned whether the payments should continue to be made to wealthy pensioners. 

Stay with us throughout the day as we bring you the latest news on the Autumn Statement. 

Chancellor Jeremy Hunt in London over the weekend Credit: ISABEL INFANTES/Reuters

 

 

How to cut your tax bill

If Mr Hunt does not act to relieve the pressure on income tax, there are still steps you can take to reduce your bill.

Paying money into your pension pot is a way to benefit from tax relief, so putting more money aside for old age means less income tax to pay now. Most people can benefit on payments of up to £60,000 into a pension, as long as they do not put in more than their annual income.

Marriage allowance offers another way to reduce your bill. This applies to couples where one partner pays the basic rate of income tax and the other earns less than the tax-free personal allowance of £12,570. Under the arrangement, £1,260 of unused tax-free allowance can be transferred to the higher-earning partner.

Esther Shaw has more details on these and seven other ways to save on your taxes here.

£100 contactless limit up for review

Shoppers could be allowed to spend more than £100 on debit or credit cards without entering their PIN as the Chancellor is reportedly set to review payments rules.

Jeremy Hunt is planning to replace EU rules with new UK regulations, in a development first reported by Sky News, which will include looking again at the contactless threshold.

Making use of Brexit freedoms, European authentication rules are also set to be reviewed, given the wave of fraud hitting the banking industry.

Open Banking, which enables data to be shared between financial institutions, could also get a revamp in an effort to help customers shop around for the best offers.

Hunt to cut taxes by £10bn, predicts Goldman Sachs

Jeremy Hunt is set to cut taxes by £10bn on Wednesday, economists at Goldman Sachs predict.

The economy has grown more strongly than expected at the time of the March Budget while higher inflation has sent more cash flowing into the Treasury’s coffers, meaning the Chancellor has around £25bn of headroom before he breaks his own borrowing targets.

As a result, some limited tax cuts are on the agenda.

James Moberly, economist at the investment bank, expects “the government will use this additional headroom to make modest tax reductions totalling up to around £10bn.”

“Measures that the government could consider include a reduction in inheritance tax, an extension of the full expensing capital allowances regime, or a cut in stamp duty,” he said.

However, Mr Hunt has warned he does not want to cut any taxes which could boost inflation - something which could be a risk if he cuts income tax, which would allow workers to spend more of their own money.

Inflation has fallen to 4.6pc, down from a peak of 11.1pc last year. But this is still more than double the Bank of England’s 2pc target.

It could mean waiting until the Budget next year for any large-scale tax changes, when the cost of living crisis is expected to be more firmly under control.

“The risk that a fiscal expansion pushes up inflation would likely be lower next year, provided that progress on disinflation continues over the coming months,” said Mr Moberly.

“If the government does wish to make more extensive tax reductions ahead of the next election, such cuts are consequently more likely to come at the Spring Budget.”

I want to cut taxes to make economy more “dynamic”, says Hunt

Taxes must come down to boost the economy, the Chancellor has said, lifting the hopes of supporters who want him to cut the burden on households and businesses.

“If we’re going to be a dynamic, thriving, energetic, fizzing economy, we need to have a lower tax burden,” Jeremy Hunt said in an interview with Times Radio.

However he also sought to temper expectations of substantial cuts this week: “We want to show people there is a path to lower taxes but we also want to be honest with people this is not going to happen overnight.”

His repetition of “a path to lower taxes” echoes his words in an interview with the Telegraph, published on Friday. The phrase suggests more tax cuts may be announced in the Budget in the Spring, and in the campaign ahead of the general election expected next year, rather than necessarily coming in Wednesday’s Autumn Statement.

Hunt: tax cuts must not be inflationary

Jeremy Hunt has been on the Sunday morning broadcast round ahead of Wednesday’s Autumn Statement. Asked about tax cuts, he refused to rule out the idea, but said that any relief to households and businesses must not stoke inflation.

On the BBC’s Sunday with Laura Kuenssberg programme, he did not comment on reports that he would cut income tax, saying: “Our priority is growth.” However he said he wanted to put the country on “the path to lower taxes”.

Separately, he told Sky News:

The one thing we won’t do is any kind of tax cut that fuels inflation We need to show there is a path to a lower tax economy.

The comments came after the Sunday Times reported that the Chancellor was considering tax cuts for low and middle earners, either through lower rates or by raising the threshold that new tax bands kick in.

£1,000 off energy bills for families near new pylons

Householders near new electricity pylons and substations will receive up to £1,000 off their annual bills under plans to be unveiled by Jeremy Hunt in the Autumn Statement.

The Chancellor will make the announcement as part of a drive to slash the time it takes to deliver energy infrastructure as Britain transitions to net zero.

In July, The Telegraph revealed plans to fast-track hundreds of miles of overhead cables and pylons to phase out fossil fuels and reconfigure the grid for an explosion in the number of electric cars.

However, the Government is concerned about a potential backlash from people opposing new developments in their neighbourhoods.

To help defuse local opposition, Mr Hunt will announce that those living near to new transmission infrastructure will receive up to £10,000 off their bills over 10 years.

The rebates are part of a package of reforms aimed at halving the time it takes to deliver new electricity networks from 14 to seven years.

A new “premium planning service” will provide advice to accelerate major planning applications.

Nationally significant low-carbon energy infrastructure will be designated as a “critical national priority”, meaning there is a presumption in favour of approval, while the rollout of electric vehicle charging points will also be prioritised.

Read the full story here

Chancellor to tackle public servants' 'wasted' time

Chancellor Jeremy Hunt will outline measures to improve productivity and tackle “time-wasting” in the public sector in the Autumn Statement. 

A review found that some public servants are having to waste a whole working day each week on admin, the Government said.  

Improvements being considered could free up over 38 million police hours each year – almost 750,000 hours every week – to make space for frontline duties, while teachers’ workloads could be cut by up to five hours a week within three years. 

Mr Hunt said: “Our public servants are among the best in the world, but we don’t help them or taxpayers when a day every week is wasted on admin.    

“We must do better by cutting admin, preventing problems before they emerge and safely introducing new technology like AI. 

“This will deliver happier workforces, better public services and a stronger economy.”

The Government said some needless admin tasks are taking time away from NHS staff treating the sick and police officers catching criminals. 

Measures are being considered to help teachers cut down on tasks such as lesson planning, inputting data and marking. 

Laura Trott, Chief Secretary to the Treasury, said: “Improving schools, hospitals and our justice system isn’t always about reaching for the spending tap. By safely wielding new technology, cutting down bureaucracy and tackling issues earlier, we can improve morale and performance – while ensuring our public services are ready for the challenges of tomorrow.”

James Cleverly, the Home Secretary, said he was committed to “removing red tape from policing”, adding: “We have already made a start by cutting bureaucracy and reducing the time officers spend attending mental health callouts that should not require a policing response, but we must go further.”

Hunt warns of ‘difficult decisions’ on benefits

Jeremy Hunt has said “difficult decisions” on benefits will need to be made ahead of Wednesday’s Autumn Statement.

The Chancellor has not ruled out a lower increase to benefits to cut spending.

The Government usually uses the September figure for inflation when uprating working-age benefits, which would mean an increase of 6.7pc next year, but Mr Hunt is reportedly considering using October’s figure of 4.6pc instead.

Speaking to broadcasters during a visit to Milton Keynes on Saturday, he said: “You are going to have to wait until Wednesday to hear the decisions I take, but one thing I want to be very clear about: there’s no easy way to reduce the tax burden.

“What we need to do is take difficult decisions to reform the welfare state.”

Economists have said using the October inflation figure would save the Government £3bn.

The savings would mainly affect working-age households getting disability or means-tested benefits, according to the Institute for Fiscal Studies, a think tank.

About nine million households would be affected, Bloomberg reported. 

Mr Hunt declined to comment on taxes but said he will “not do anything to jeopardise” the fight against inflation. 

Earlier this week the Chancellor announced that benefits claimants who refuse to look for a job will be stripped of their right to free prescriptions and discounted bus travel.

Families stand to save £180,000 from IHT cut

Families would save £180,000 if the Chancellor halves inheritance tax in next week’s Autumn Statement, the Institute for Fiscal Studies (IFS) has said. 

Jeremy Hunt is understood to be planning a cut to the levy, with a report in The Times suggesting he could reduce the rate from 40pc to 20pc. 

The IFS, a think tank, said the 5pc of grieving families who pay the largest amount of inheritance tax would see their bills reduced by £180,000 if the rate were halved. 

Those in London and the South East would benefit most, as rising house prices in these areas have dragged an increasing number of ordinary families into paying the tax. 

David Sturrock, senior research economist at the IFS, urged the Chancellor to reform the tax to make it harder for the richest to avoid paying it.

Boris Johnson weighs in on calls for inheritance tax cut

Boris Johnson has called for an inheritance tax cut to give younger generations a boost. 

The former prime minister said the move was “now overdue” because of societal changes that have made it difficult for Millennials and Gen Z to amass the same amount of wealth as baby boomers.

Writing in the Daily Mail, he said: “We baby boomers had the full-fat pensions; we had the free ­university; we had the cheap housing.

“Those benefits allowed us to accumulate phenomenal wealth, as a generation, and in the name of intergenerational fairness it is right that more of that wealth should now be passed on to our descendants.”

He said a “little bit more cash” from a grandparent’s will could make all the difference to young people struggling to save up for a deposit on a flat or pay for childcare.

Mr Johnson said young people today struggle to pay back the cost of university education and get on the property ladder. 

Meanwhile, he pointed out that Baby Boomers like him had their entire tuition paid for by the state and got a mortgage almost instantly afterwards because of then-chancellor Nigel Lawson’s Mortgage Interest Relief at Source scheme.

He said his generation “had it easy”, adding: “Isn’t it right, therefore, that of the colossal wealth we have been able to accumulate, we should be able to leave a little bit more behind?”

Mr Johnson said the Left will go “bananas” when an inheritance tax cut is announced next week and Tories will be accused of “political opportunism” and “favouring a minority” by cutting inheritance tax – but they will be wrong.

Use our calculator to see how much you’d pay under the current inheritance tax rules.

Hunts says Britain's economy has "turned a corner"

Jeremy Hunt has given his clearest indication yet of tax cuts to come in the Autumn Statement. 

Speaking to The Telegraph, the Chancellor hailed a “turning point for the economy”, saying “this is the moment” to focus on growth. 

He refused to reveal specifics but it is understood that business and inheritance tax cuts are among the measures being considered.

In a signal of tax cuts next week, he told The Telegraph: “Without pre-empting the decisions that the Prime Minister and I make, this is an Autumn Statement for growth. It’s a turning point for the economy.”

Mr Hunt said Britain has “turned a corner in a big way” after the Government’s pledge to halve inflation was achieved this week. 

Asked if now was the time for economic growth, he said: “Yes, absolutely. This is the moment. We’ve got to go for it as a country and I think we’ve got a big, big opportunity.”

He continued: “The big message on tax cuts is there is a path to reducing the tax burden and a Conservative government will take that path.”

Speaking to the BBC, the Chancellor said he wanted firms to be the focus of tax incentives. 

During a visit to the ITM Power manufacturer in Sheffield, he said: “In terms of tax cuts you’ll have to wait and see but I will say the priority is helping businesses like this to succeed.”

Stocks and shares ISA reform under consultation

Jeremy Hunt is considering new rules that would clarify the legality of fractional shares being held in stocks and shares Isa accounts. 

Allowing fractional shares to be held in these accounts would form part of the Government’s efforts to boost investment in the UK stock market, Bloomberg reports.

Earlier this year HM Revenue and Customs hit out at investing platforms, including popular app Freetrade, that allow investors to buy fractional shares in popular US companies and put them in stocks and shares Isas.

HMRC said under Government and tax office rules in place since 1998, investors are not allowed to hold fractional shares in Isas because the tax office only recognises full-shares for tax purposes.

As a result savers - many of who unknowingly own the banned shares- were left at risk of being hit with a tax bill on their holdings or at risk of HMRC voiding any Isas holding fractional shares, as revealed by senior money reporter James Fitzgerald

The proposal is one of several ISA reforms currently under consideration at the Treasury ahead of next week’s Autumn Statement. 

Chancellor Jeremy Hunt is also looking at the creation of a ‘Great British Isa’ that would hand savers an extra £5,000 if they invest in UK-listed companies. 

In further good news for savers, Treasury ministers are considering plans ahead of this month’s Autumn Statement that will allow savers to open multiple Isas of the same type in a single tax year without losing their £20,000 allowance.

Households dealing with 'peak' pain from interest rates, says Bank of England official

Consumers are dealing with the worst of the impact of high interest rates right now, a Bank of England deputy governor has said.

Sir Dave Ramsden said that 15-year high interest rates of 5.25pc would deliver the “peak impact on growth” during the last three months of this year.

His comments come as pressure increases on Chancellor Jeremy Hunt to cut taxes as part of the Autumn Statement next week. The country currently has the highest tax burden since the Second World War and better than expected economic data has given Mr Hunt some headroom to make cuts. 

The Telegraph’s Head of Money Ben Wilkinson has told Jeremy Hunt  ‘no excuses – taxes must fall next week’. 

The Chancellor obviously has to keep his cool and keep inflation under control – to fail at that really would be the final nail in the Tory coffin – but he also needs to send a message of intent and acknowledge that taxes need to fall.

Britain’s finances are looking up, and we need a break. This week, JP Morgan estimated the Government has as much as £10bn in “headroom” (that’s economist speak for lower than expected future borrowing costs), meaning there is space in Treasury coffers for some giveaways. Committing next week to cutting a range of taxes from April next year is a reasonable response.  

Sir Dave Ramsden, deputy governor at the Bank of England says high interest rates are having a sharp impact on households Credit: Hollie Adams/Bloomberg

Telegraph readers call on Jeremy Hunt to unfreeze thresholds and abolish hated levies

Telegraph readers are calling on Chancellor Jeremy Hunt to unwind the “stealth” income tax grab and abolish inheritance tax in his Autumn Statement next week.

Unfreezing the thresholds was the top priority for readers who resoundingly picked it as the measure they would most like to see announced by Mr Hunt on Wednesday.

The freeze to income tax thresholds is dragging ever more middle earners into the 40pc higher rate of income tax.

More than 5,000 readers used the Telegraph’s online tool to reveal the most important fiscal policies to the nation ahead of what is likely to be one of the last chances the Chancellor gets to influence the outcome of the next general election.

Alongside the unfreezing of income tax thresholds, the complete abolition of inheritance tax – “Britain’s most hated levy” – and a cut to income tax for middle earners all ranked highly on readers’ wish-lists.

A commitment to maintaining the state pension triple lock is also a popular choice, coming ninth overall in our ranking. Abolishing stamp duty land tax – the levy paid on property purchase – also comes high in readers’ priorities.

Readers were also focused on the steps Mr Hunt could take to stimulate economic growth. GDP showed no growth in the three months from July to September this year, and the Bank of England is forecasting just 0.1pc economic growth next year.

Another key theme to emerge was an awareness that the Tories need to do more to win back wavering voters, as this may be the last fiscal statement before an election next year.

Use our tool to build your own Autumn Statement 

Council tax to rise by £120 a year for average family home

Council tax is set to rise by up to £120 a year for the average family home, The Telegraph can reveal.

The Treasury will allow local authorities to put up their bills by up to 5pc from April, flying in the face of calls from MPs to introduce tax cuts in next week’s Autumn Statement. 

The above-inflation increase will allow the vast majority of local authorities to charge more than £2,000 council tax for a typical Band D home in 2024-25. Campaigners say the decision ‘will heap misery on struggling households’. 

Conor Holohan, of the TaxPayers’ Alliance, said “On top of the tax burden already reaching a 70-year high, taxpayers are now staring down the barrel of inflation-busting local rate rises. Town hall bosses should slash local waste and stop council tax rises.”

Local authorities will not decide until the new year by how much they will increase council tax. In recent years, the vast majority have opted to increase the tax by the maximum amount. Inflation now stands at 4.6 per cent, and is expected to fall in the coming months. It means council tax rises are likely to exceed inflation.

However, many are calling on the Chancellor to make the most of the drop in inflation and introduce tax cuts in the upcoming fiscal statement. The Treasury is understood to be considering slashing inheritance tax as one of its Autumn Statement measures. 

The Telegraph’s Head of Money Ben Wilkinson has called for tax cuts, telling Jeremy Hunt  ‘no excuses – taxes must fall next week’. 

What we know so far

Good morning. Calls for tax cuts in next week’s Autumn statement are coming in thick and fast after a week of better than expected economic data. 

The Telegraph’s Head of Money Ben Wilkinson leads the way with a comment piece out this morning telling Jeremy Hunt  ‘no excuses – taxes must fall next week’. 

The Chancellor obviously has to keep his cool and keep inflation under control – to fail at that really would be the final nail in the Tory coffin – but he also needs to send a message of intent and acknowledge that taxes need to fall.

Britain’s finances are looking up, and we need a break. This week, JP Morgan estimated the Government has as much as £10bn in “headroom” (that’s economist speak for lower than expected future borrowing costs), meaning there is space in Treasury coffers for some giveaways. Committing next week to cutting a range of taxes from April next year is a reasonable response.  

There are plenty of Autumn Statement predictions flying around today so here’s a quick roundup of what we know so far: 

Don’t forget to send a message to Jeremy Hunt by building your own Autumn Statement with the tax cuts that matter to you

Chancellor announces biggest welfare shake-up for a decade

Unemployed benefits claimants who refuse to take a job will completely lose their handouts, the Chancellor has announced ahead of next week’s Autumn statement. 

Jeremy Hunt said the “very big change in the social contract” would rebalance the system “in favour of taxpayers who are funding benefits”, writes political correspondent Amy Gibbons.

In the biggest welfare shake-up for a decade, people who “coast” on jobseeker benefits for 18 months will be forced to take on work or be kicked out of the system.

Under the plans, if people are able to work but still are not willing to take on a job, a work placement or “intensive activity” after a year and a half of trying, they will have their Universal Credit claims closed completely.

There will be exemptions for people facing domestic abuse and those who are otherwise especially vulnerable. Those on the standard allowance who refuse to engage with the system at all will have their claims closed after six months.

Meanwhile, ministers are investing £2.5 billion over the next five years in schemes to help people back to work. The latest published data show there were 300,000 people who had been unemployed for over a year in the three months to July.

Mel Stride, the Work and Pensions Secretary, said: “We are rolling out the next generation of welfare reforms to help more people start, stay and succeed in work. We know the positive impact work can have, not just on our finances, but our health and wellbeing too.”

Former minister Nadhim Zahawi calls for abolition of IHT

Rt Hon Nadhim Zahawi MP has called on the Chancellor to abolish inheritance tax as part of the Autumn Statement next month. 

In an article for the Telegraph, the former Chancellor said ‘It’s time the Tories started striking some open goals’ including ending the ‘infamous death tax’ and full expensing.

By successfully halving inflation to 4.6pc, Zahawi said the Treasury now has the opportunity to do away with inheritance tax. ‘A recent poll undertaken by my old firm, YouGov, found that half of Britons view inheritance tax as unfair. Others have found that it is seen to be the most unfair tax in the country,’ he writes. 

Full expensing, he explains, means that businesses can immediately deduct the full cost of any investment in qualifying plants or machinery. 

Currently there is a temporary full expensing policy in place but it is set to end in 2026.

But the truth is that my party is trailing in the polls. Setting aside the moral and economic cases I hope I have been able to make above, for this reason we cannot afford to hold back. 

We must look to implement policies that make Conservatives feel they have a positive reason to vote for us. And we must remind businesses that it is the Conservative Party, not the Labour Party, who is on their side.

It is not often that the Government has the ability to kick the proverbial ball into a wide open goal. This Autumn Statement provides a rare opportunity to strike.

The call to abolish IHT comes as the Telegraph reveals Jeremy Hunt is planning to slash inheritance tax at next week’s Autumn Statement.  

The Prime Minister and the Chancellor have discussed cutting the 40pc rate after Treasury officials concluded the move would not be inflationary, writes political editor Ben Riley-Smith.

However, Rishi Sunak and Mr Hunt will not reach a final decision until the Office for Budget Responsibility reveals how much financial headroom the Treasury has. 

The move would be welcomed by Tory backbenchers who have been lobbying Mr Sunak for tax cuts.

Nadhim Zahawi has called on the Government to abolish IHT in the upcoming Autumn Statement Credit: PA/PA

The Rt Hon Nadhim Zahawi MP is a former Chancellor of the Exchequer and patron of the Adam Smith Institute

How would an inheritance tax rate cut impact families?

Slashing the inheritance tax rate – as opposed to raising the frozen tax threshold – will be more beneficial the wealthier you are, analysis shows. 

The Telegraph understands that Rishi Sunak and Jeremy Hunt are planning to reduce the 40pc rate in order to appease Tory backbenchers calling for tax cuts to boost growth.

By lowering the rate to 30pc, the government would save a family inheriting a £1.5m estate £50,000 in tax, according to calculations by the stockbroker AJ Bell, however, a family inheriting £10m would shield almost £1m from the taxman. 

The Telegraph has been campaigning for the government to scrap inheritance tax outright, as official figures show hundreds of thousands will pay the levy over the next few years. 

Others have called for an end to the freeze on tax thresholds, implemented by Mr Sunak in 2021 when he was Chancellor. 

Laura Suter, of AJ Bell, said: “The simple way to cut inheritance tax bills would be to raise the threshold to reflect inflation. 

“By freezing the threshold but cutting the headline rate the government is taking with one hand and giving with the other. If the inheritance tax thresholds had been increased with inflation, rather than been frozen, the nil rate band would stand at £499,000 from April 2024, rather than £325,000.”

There have been growing calls for the government to scrap inheritance tax as soaring house prices have forced thousands of middle-class families to pay death duties, initially reserved for the very wealthy.

The government must “learn lessons” from first-time buyer scheme

With the government under pressure to help people struggling to buy their first home, experts are urging Jeremy Hunt not to repeat old mistakes – as new statistics reveal the long-term impact of the controversial Help to Buy loan scheme. 

Figures published today show that 387,195 properties were bought using the Help to Buy loan scheme, of which 328,346 were purchased by first-time buyers.

The government-backed scheme, introduced in 2013, gave first-time buyers equity loans of up to 20pc of the purchase price – 40pc in London – to help them afford a new build home with only a 5pc deposit.

But the scheme has been heavily criticised for pushing first-time buyers to take out loans they later found they could not afford. 

Karen Noye, of wealth manager Quilter, said:Its design, which allowed the government to gain a share of the property’s appreciation, meant that as house prices increased, so did the government’s profit from these loans. This aspect became particularly burdensome for homeowners when they reached the end of their five-year interest-free loan period. 

“With the interest rate initially set at 1.75pc and then increasing annually based on inflation, many homeowners faced escalating costs, adding financial strain to what was initially an assistance program.”

Thousands of first-time buyers are now in arrears after purchasing their home with Help to Buy, Telegraph Money revealed last month. 

By increasing demand for new homes, the scheme may have also contributed to a rise in house prices, “making the market less accessible in the long run,” Ms Noye said. 

She added: “The government may once again announce a housing scheme next week in the Autumn Statement and hopefully they can learn lessons from this more than decade long experiment.”

A stamp duty cut or an increase in the Lifetime Isa cap are two of the policies Mr Hunt could implement to help struggling millennials get their foot on the property ladder.

The Chancellor is looking at increasing the property price cap on Lifetime Isas, which has been stuck at £450,000 since 2016. Young savers are currently fined when they breach this cap, despite soaring house prices. 

Last month it was reported that the government is considering extending its mortgage guarantee scheme, which lets buyers take out a mortgage with just a 5pc deposit. 

Rishi Sunak and Jeremy Hunt planning inheritance tax cut

After months of insisting there is no room for tax cuts, Jeremy Hunt is planning to slash inheritance tax at next week’s Autumn Statement, the Telegraph can reveal. 

The Prime Minister and the Chancellor have discussed cutting the 40pc rate after Treasury officials concluded the move would not be inflationary, writes political editor Ben Riley-Smith.

However, Rishi Sunak and Mr Hunt will not reach a final decision until the Office for Budget Responsibility reveals how much financial headroom the Treasury has. 

The move would be welcomed by Tory backbenchers who have been lobbying Mr Sunak for tax cuts.

Heirs must pay inheritance tax on the part of someone’s estate worth more than the tax-free allowance of £325,000, which is currently frozen until 2028. The allowance rises to £500,000 for those giving a family home to their children, and to £1m for couples.  

While slashing the 40pc rate would save families billions of pounds over the next few years, it would not reduce the number of families caught out by the tax. 

The Telegraph has been urging the government to abolish inheritance tax, which netted a record £7.1bn from bereaved families last year. 

Credit: Simon Dawson / No10 Downing Street

Further headroom for tax cuts in the Autumn Statement says JP Morgan

More good news to wrap up the day for Chancellor Jeremy Hunt, as JP Morgan says he has enough room to cut taxes by as much as £10bn at next week’s Autumn Statement as the outlook for the economy improves and inflation slows.

Allan Monks, an economist at JP Morgan, said he expects the Government to borrow around £100bn this financial year, down from the £132bn forecast by the Office for Budget Responsibility at the Budget in March. 

At the same time, Mr Hunt should have around £26.5bn of headroom when it comes to hitting his target of getting the national debt to fall in five years’ time, as a share of GDP, writes deputy economics editor Tim Wallace

Mr Monks said some of this financial firepower could be used to offer tax cuts of between £5bn and £10bn. This is roughly equivalent to taking 1p off the basic rate and higher rate of income tax.

He suggested tax and spending changes to encourage more people back into work could be on the agenda.

 

'Great British Isa' could give saves extra £5,000 allowance

Savers would be handed an extra £5,000 Isa allowance if they put money into a “Great British Isa” under plans to boost the economy, writes Gareth Corfield

Jeremy Hunt is actively considering proposals to introduce an additional £5,000 allowance for savers who want to invest in UK-listed companies, The Telegraph understands.

It follows a letter to The Times calling for such reforms, signed by City figures including former pensions minister Baroness Altmann and the bosses of high-profile investment groups such as Panmure Gordon and Shore Capital.

Proposals for a new UK-only Isa would incentivise tax-free investment in businesses listed on the London Stock Exchange, providing a much-needed capital boost to the main UK stock market, supporters of the proposals have said. 

Treasury ministers are also considering plans ahead of this month’s Autumn Statement that will allow savers to open multiple Isas of the same type in a single tax year without losing their £20,000 allowance. 

It is hoped that the shakeup will encourage providers to offer more competitive rates, and allow savers to make hundreds of pounds more in tax-free interest every year, writes senior money reporter James Fitzgerald

Government to announce crackdown on work-from-home civil service

The government is reportedly planning to unveil a crackdown on working from home in the civil service around the time of the Autumn Statement.

A number of senior civil servants have received a draft letter from ministers telling them to implement “an expectation of increased office-based working” among their staff, the publication Civil Service World reported today.

Civil servants will be expected to spend a minimum of 60pc of their time working in the office or on official business, according to the report. The change will not be officially announced until around the time of next week’s fiscal statement, government sources told Civil Service World.

Ministers are pushing civil servants to return to their desks amid growing concerns over public sector productivity.

Office occupancy data suggests the proportion of staff working face-to-face with their colleagues varies significantly between departments, as the chart below shows. However, these numbers do not capture staff based outside of the departments’ headquarters.

HM Revenue and Customs, which has one of the lowest occupancy rates, has repeatedly insisted there is no connection between its working-from-home policy and its poor customer service, which recently has come under heavy criticism from MPs, accountants and taxpayers. 

What tumbling inflation means for Hunt’s hopes of tax cuts

With signs that the worst of the cost of living squeeze is over, inflation at a two-year low and interest rates expected to fall next year, there is now speculation that Hunt will announce tax cuts next week, writes our economics editor Szu Ping Chan and deputy economics editor Tim Wallace.

In theory, the Chancellor can tax and spend as he pleases. 

In practice, Hunt, who was brought in by former prime minister Liz Truss on a platform of fiscal rectitude, will stick to self-imposed tax and spending rules requiring him to get debt falling in five years time.

The good news is that tax revenues are booming thanks to stealth levies on British workers. Furthermore, with inflation finally falling, this will help the Government deal with a debt interest bill that is expected to climb to £94bn this tax year alone. It also puts less pressure on Whitehall budgets, which are set in cash terms.

Taking all this into account, the Resolution Foundation believes this has left Hunt with around £13bn of headroom to play with, double what he had in the spring.

Read the full explainer here

Could inflation drop mean tax cuts in the Autumn statement?

Good morning. Better than expected inflation data is welcome news for Prime Minister Rishi Sunak who has now achieved one of the five goals he set out at the start of the year. 

Inflation fell to a two-year low of 4.6pc in October. The Office for National Statistics (ONS) said falling energy costs, cheaper hotel stays and a stabilisation in food prices helped price rises ease from 6.7pc in September.

The good news has reignited calls for tax cuts in next week’s Autumn statement as the Chancellor told Sky News, ‘Now we are beginning to win the battle against inflation, we can move onto the next part of our economic plan, which is the long term growth of the British economy.’ 

The cost of borrowing for the Government has fallen to fresh five-month lows.

The yield on 10-year UK gilts - the returns the Treasury promises to buyers of its debt — has dropped to 4.14pc, having last been at that level in June.

As a result there may be more headroom for the Chancellor to reduce tax burden on Brits - current at the highest level since the Second World War. 

Read the Telegraph’s analysis here 

Your message to Jeremy Hunt

The Autumn Statement is perhaps the Conservatives’ last chance to convince wavering voters to back them at the ballot box ahead of the next general election in 2024 or early 2025.

Our tool puts the power in your hands. What does Jeremy Hunt have to do to secure your vote? From inheritance tax to benefits, it’s time to tell the Tories what Telegraph readers want. 

Next week, we’ll collate the most popular policies among readers – and present them to the Chancellor.

Use the tool here 

Crowd-pleasing announcements on the cards?

In its Autumn Statement predictions, accountancy firm RSM has said, ‘while there may be some eye-catching announcements, our expectation is for mainly low-key measures designed to counter inflation...’ The firm also predicted a focus on technical issues that address known challenges, stimulate business investment, and tackle tax avoidance. 

RSM added, ‘no doubt, he will keep some powder dry for a pre-election Spring Budget.’

Here are a few of the announcements RSM judges to be ‘confident predictions’ for the statement: 

Income tax and personal allowances: We expect the chancellor to find room for small giveaways, which could include increasing the personal allowance or higher rate threshold from 6 April 2025, when inflationary pressures will hopefully have eased.

Inheritance tax: IHT thresholds could be unfrozen, the various current annual gifting allowances could be replaced with a single allowance, or he could instead reduce the headline rate of IHT. Read more about IHT predictions here

Capital gains tax: Currently, assets inherited on an individual’s death are uplifted to their market value for CGT purposes, so people hold on to assets longer than they otherwise would. Scrapping this rule at the same time that IHT rules are relaxed could increase inter-generational asset transfers and may increase tax receipts overall.

Stamp duty land tax: SDLT cuts made in the 2022 mini-budget are set to remain in place until 31 March 2025. RSM expects this cut to be made permanent and for Mr Hunt to go further in increasing the thresholds at which SDLT is paid. More on stamp duty predictions here

First time buyers: Announcements are expected on extending the SDLT relief available to first time buyers and financial support to help them onto the property ladder. 

Chancellor Jeremy Hunt may find some crowd-pleaser announcements for the Autumn statement Credit: Paul Grover for the Telegraph/Paul Grover for the Telegraph

Liz Truss's task force urges government to implement sweeping reforms

The Growth Commission has said Britain’s high tax burden was partly to blame for the low growth trap the country is currently in, and has urged Chancellor Jeremy Hunt to slash taxes. 

The group, established by former Prime Minister Liz Truss, also took aim at onerous net zero regulations, weak public sector productivity and planning rules, writes the Telegraph’s economics editor Szu Ping Chan. 

As well as tax cuts the group has called for sweeping reforms to planning, welfare and the public sector in the Autumn Statement.

So-called GDP per head was only 0.1pc higher in the second quarter of 2023 than its pre-Covid level, according to official data.

The Commission warned that a six-year freeze in income tax thresholds introduced by Mr Sunak would be the equivalent to a 9p increase in all rates of income tax by the end of the decade as workers are forced to hand more of their pay rises to the taxman.

Its growth budget warned: “If we carry on the same way we are likely to continue to stagnate with rising taxes or borrowing or both to pay for ever-growing public spending. This won’t work”.

Treasury considers £4bn disability benefits overhaul

Welfare reforms aimed at encouraging more people in to work are under consideration at the Treasury ahead of next week’s Autumn Statement. 

Under the proposals being looked at it ,will become harder for people to claim disability benefits and more new claimants will be required to show they are trying to find a job, reports our deputy economics editor Tim Wallace

In good news for the Chancellor Jeremy Hunt the changes could save £4bn over four years, but may leave some benefits recipients on universal credit alone, rather than receiving an additional £390 per month.

If the reforms go ahead they are expected to be announced in the Autumn Statement on 22 November. 

Mr Hunt - who survived Prime Minister Rishi Sunak’s cabinet reshuffle - faces continued pressure from fellow Conservative MPs to announce tax cuts in the upcoming fiscal statement. 

The Chancellor has promised to do more to encourage people into work rather than staying on benefits. 2.6 million people of working age are currently classed as economically inactive – neither in work, nor looking for work – citing long-term sickness as the cause.

Labour plans pension reform to boost growth

If elected to Government, the Labour party will conduct a review of the UK pensions system in a bid to unlock retirement capital to use to boost growth, reports the Financial Times. 

The UK pension market is worth around £2.5trn according to the Government, but has traditionally invested in off-shore markets and domestic gilts. 

Shadow Chancellor Rachel Reeves said on Monday that Labour would review the entire pensions system to ensure it delivered for savers and companies. The review would include private sector defined contributions as well as defined benefit schemes and local authority pensions. 

Reeves also said the changes could increase the average pension pot by up to £37,000, according to the Guardian. 

The announcement from Labour comes ahead of the Autumn statement on 22 November when Chancellor Jeremy Hunt is expected to announce plans to boost Britain’s growth. 

Shadow Chancellor Rachel Reeves has announced a pensions review if Labour wins power Credit: Nicola Tree/Getty Images

 

Ask a tax expert

Next Monday the Telegraph’s tax expert Mike Warburton will be answering your burning tax questions live at 12pm. Email your queries to him now at taxhacks@telegraph.co.uk. 

Credit: John Lawrence for the Telegraph

Chancellor could introduce a stamp duty cut for downsizers

The Chancellor has been urged to introduce a stamp duty cut for downsizers in order to help solve Britain’s housing crisis.

Jeremy Hunt is reportedly considering slashing stamp duty at next week’s Autumn Statement, with rumours this could be targeted at the country’s “last-time buyers.” 

Last month Telegraph Money explored how stamp duty relief could incentivise older homeowners to move into smaller dwellings and free up larger family homes. 

Alice Haine, of stockbroker Bestinvest, said: “A stamp duty exemption for downsizers could be an effective way to get the lacklustre housing market moving again, as older homeowners with substantial equity in their property may feel more encouraged to sell up and move on.”

Halving the inheritance tax rate would cost the government £15.4bn

There is growing speculation that Jeremy Hunt could announce an inheritance tax cut in next week’s Autumn Statement. 

Lowering the tax rate is one option on the table if the Chancellor presses ahead with reform. 

At 40pc, Britain has one of the highest inheritance tax rates in the world. Slashing this rate would not reduce the number of families paying inheritance tax every year. However, it would drastically cut their bills, according to analysis by Quilter.

The wealth manager calculates that bringing the rate down to 30pc would cost the government £7.7bn from 2024-25 to 2027-28 while halving it to 20pc would cost £15.4bn. 

Rishi Sunak to announce inflation win

The Prime Minister is set to announce this week that he has met his target of halving inflation by the end of the year. 

Official figures released on Wednesday are expected to show that inflation fell from 6.7pc in September to below 5pc in October.  

The Bank of England said this month in its monetary policy report that inflation will fall to 4.8pc mainly due to the reduction in the Ofgem energy price cap. 

Delivering on their inflation pledge would be a significant win for the government. Rishi Sunak declared in January that he intended to halve inflation by the end of the year. At the time inflation was running at an average of 10.7pc.

Credit: Kin Cheung/PA

What would be the impact of a stamp duty cut?

The Chancellor is reportedly considering a stamp duty cut after discovering that he may have more fiscal “headroom” than expected. 

Stamp duty is due on properties costing more than £250,000. Those not eligible for first-time buyers’ relief paid over £3bn in stamp duty land tax in the last quarter, according to statistics from HM Revenue & Customs. 

Slashing the unpopular tax could deliver a much-needed shot in the arm of the slowing UK property market and could also be a huge vote-winner for the government. 

Rob Gill of broker Altura Mortgage Finance said: “It would be a popular, impactful move that would boost the property market and the wider economy, so will surely be hard for the Chancellor to resist.”

However, other property experts have warned it would create more harm in the long-term. Rohit Kohli of broker The Mortgage Stop said: “Stamp duty cuts will likely see prices continue to rise and it will continue to become harder for first-time buyers to get onto the property ladder.”

The government has previously introduced stamp duty holidays, for example during the coronavirus pandemic, as a way of stimulating the housing market.

But the Chancellor could unveil a more targeted cut in the Autumn Statement. For example, Make UK Modular, a trade body, has called for stamp duty incentives for the most energy efficient homes.

This is how much the Tory stealth tax raid is costing you

Increasing numbers of workers will be dragged into higher tax brackets unless the Chancellor finds some spare cash for giveaways while going over forecasts from the Office for Budget Responsibility ahead of the Autumn Statement.

Britons will be taxed an extra £52bn a year by 2027 if Jeremy Hunt fails to adjust tax thresholds for inflation, according to the Institute for Fiscal Studies.

Allowances are normally adjusted in line with consumer price growth every year, but Rishi Sunak chose to freeze them when he was Chancellor in 2021.

Strong pay growth and high inflation mean the decision, which was then only projected to raise £8bn a year, has proved far more lucrative than intended.

Use the calculator to see how much more income tax you are paying as a result.
 

Read more here... 

Business rates in spotlight amid warnings of pub and restaurant closures

Hospitality bosses have been warning of a shakeout of the nation’s pubs and restaurants if the Chancellor does not freeze business rates.

According to the trade association UK Hospitality, the industry will face a rise of almost £1bn if rates rise with inflation as planned.

More than 200 of Britain’s most senior hospitality chiefs have signed a letter to the Chancellor warning that businesses will close their doors for good without intervention.

They are also asking that the Chancellor extend a special relief scheme that was brought in to help retail, leisure and hospitality businesses with inflation.

Last month the chief executive of Fuller’s, Simon Emeny, told The Telegraph he believed pub and restaurant closures would increase tenfold if rates go up as planned.

He said: “The tax burden on pubs is simply enormous. We, as a sector, account for 0.5pc of UK revenue, but we pay 2.5pc of UK business rates, so we’re disproportionately paying our way.”  

Big retailers, too, have warned that a rise in business rates could put upward pressures on prices at a time when they are still grappling to bring inflation under control, The Sunday Times reports today.

Credit: Johnny Green/PA Wire

Government "not making it easy" for retailers to invest in high streets

High taxes are putting retailers off investing in the nation’s struggling high streets, the boss of Majestic Wine has said.

In an interview with The Sunday Telegraph, John Colley, chief executive of the wine retailer, said: “You look at some high streets across the country and there’s empty units - that’s a challenge for the government. They are not making it easy for retailers to invest in business.”

Mr Colley also criticised changes to alcohol duty this year that have necessitated a rise in prices on its shelves. 

“We all know that when you go to a restaurant, you order some wine. When you get married, you order some wine. It is the UK’s most popular alcoholic beverage, so why would you put the tax up at a level that is going to be prohibitive to some businesses?”

However, his comments come as reports claim wine drinkers may be in for another round of price increases with the Chancellor said to be planning another duty rise for the second time in four months.

Industry officials have been warned Jeremy Hunt will announce the increase in duty at the Autumn Statement, The Times reported.

Rates are expected to increase in line with the retail price index – currently measuring at 8.9pc – meaning the average price of a bottle of red wine will hit £8. Currently, an average bottle of red wine costs £7.74. 

Stamp duty: what is the burden of unpopular levy?

Buying a home in the UK means coming face to face with what is one of Britain’s most hated taxes that is second only to inheritance tax.

But reports claim the Chancellor is considering a cut to stamp duty ahead of the Autumn Statement.

The Telegraph found in a recent poll that nearly a fifth of voters think stamp duty is one of the most unjust taxes

What you eventually pay depends on whether you are a first-time buyer, a home-mover or purchasing a second-home or buy-to-let property, and the value of the property you’re buying.

Hunt considering cuts to inheritance tax and stamp duty, reports claim

The Chancellor is considering bringing forward plans to cut inheritance tax (IHT) and stamp duty in the Autumn Statement because improved public finances have given him more fiscal headroom than expect, The Sunday Times reports today.

It comes after the Office for Budget Responsibility (OBR) said this week that headroom had grown to between £13bn and £15bn. 

Jeremy Hunt was previously expected to be waiting until the budget update next March to cut taxes, but is said to be reconsidering this timing faced with weak growth forecasts.

A deep freeze on tax thresholds and rising property prices have dragged thousands more families into paying IHT. 

One in eight families will soon face inheritance tax bills if the Government does not take action, according to analysis by the Institute for Fiscal Studies. 

Telegraph Money has called on the Government to abolish the tax ahead of the Autumn Statement, with more than 50 Conservative MPs backing the campaign.

Credit: Photo by TOLGA AKMEN/POOL/EPA-EFE/Shutterstock

Cut corporation tax to boost the economy, says Truss taskforce

Slashing corporation tax would deliver a long-term boost to the economy worth 3pc of GDP, a taskforce set up by Liz Truss has said. 

A report by The Growth Commission, which was founded by the former Prime Minister, claims the Treasury has “exaggerated” the cost of cutting the tax because it has not carried out sufficiently sophisticated modelling, Will Hazell and Amy Gibbons report.

The rate of corporation tax was raised from 19pc to 25pc by Rishi Sunak last April.

An extract of the report, seen by The Telegraph, says that “the headline rate of corporation tax remains hugely important for driving footloose investment”, pointing to high levels of foreign investment in Ireland as an example.

It proposes that Mr Sunak’s increase should be reverse next year and “in the long-term” reduced to 15pc.

Shanker Singham, the co-chairman of the commission, said: “We are stuck with low growth if we aren’t ambitious about what can make a difference to our country’s growth prospects in the long-term.

“The government needs to break out of the relentless cycle of high tax and spend.”

A government source told The Telegraph the Autumn Statement “is all going to be about growth”.

Credit: Paul Grover for The Telegraph

How the Chancellor could free half of households from inheritance tax

Jeremy Hunt has been urged to spare thousands of grieving families from paying inheritance tax by simplifying death duty and increasing the tax-free threshold to £500,000.

The Chancellor could amend the system by increasing the level at which families start paying the tax from £325,000 to £500,000, Charlotte Gifford writes, freeing half of households who would otherwise have paid death duty from the levy. 

Currently, families with children are granted an additional £175,000 exemption to pass on their estate to their children, but single people and the childless miss out on this benefit.

By removing the exemption and instead applying it to all households, thousands of people would no longer owe money to HMRC on the death of a loved one, according to analysis by wealth manager Quilter. 
 

Such a move would cost the exchequer around £1.4bn annually, which would be cheaper than a cut to the headline rate of inheritance tax while helping the vast majority of those currently caught by the levy. 

The tax allowance that could supercharge Britain’s economy

Jeremy Hunt’s plans to extend the full expensing regime, which allows companies to save up to 25p from their tax bill for every £1 they invest, could boost the economy and help offset the rise in corporation tax, writes Jeremy Warner

Full expensing, which builds on the “super-deductions” tax break Rishi Sunak announced when chancellor, offsets these negatives, at least partially.

Early signs are encouraging. Since super-deductions were introduced, Britain has enjoyed the fastest business investment growth in the G7, albeit from a very low base. Full expensing, which allows companies to save £250k in tax for every £1m invested, gives Britain the joint-most competitive capital allowances regime in the OECD. Prior to its introduction, the UK was a lowly 32nd.

Tax policy should ideally aim for as broad a base as possible, but with low headline rates that are sectorally agnostic and don’t favour one set of economic players over another.

When you see levels of business investment as poor as Britain’s, however, there is a good case for extra incentives, or eventually we won’t have much of an economy left to tax in the first place.

Bottle of red to hit £8 with spirit duty rise

Wine drinkers may want to stock up as the Treasury prepares to raise alcohol duty for the second time in four months.

Rates are expected to increase in line with the retail price index – currently measuring at 8.9pc – meaning the average price of a bottle of red wine will hit £8. Currently, an average bottle of red wine costs £7.74. 

The Times reports industry officials have been warned Jeremy Hunt will announce the increase in duty at the Autumn Statement on November 22.

Drinks industry officials have been urging Mr Hunt to freeze rises in alcohol duty after imposing an increase of around 10pc for spirits, while a typical bottle of wine saw an increase of 20pc. 
 

Miles Beale, chief executive of the Wine and Spirits Trade Association, said earlier this week: “The damage done by August’s hikes are clear: they have stoked inflation, pushed up prices for cash-strapped consumers and damaged British businesses across the hard-hit alcoholic drinks and hospitality sector, including distillers.

“A second alcohol duty rise would be self-defeating and could prove the final nail in the coffin for some British drinks businesses.”

HM Treasury has said a final decision had not yet been made. 

Hunt eyes £10bn tax cut for businesses

Jeremy Hunt is considering easing pressure on businesses with a £10bn tax cut by extending provisions for “full expensing” in the upcoming Autumn statement. 

Full expensing allows companies to write-off the cost of their investments. For every £1 they invest, a company can cut their tax bill by 25p.

Treasury officials have concluded extending the scheme to 2028-29 would not fuel inflation, passing one of the Chancellor’s key tests for any tax break.

Mr Hunt wants to keep the scheme running for another three years, the Telegraph’s political editor Ben Riley-Smith reports, in a five-year fiscal plan he intends to map out on November 22.

This will cost around £10bn per year, although the Treasury is still awaiting forecasts from the Office for Budget responsibility before making a final decision. 

How much will inheritance tax cost you?

Amid reports that Chancellor Jeremy Hunt is mulling announcing a cut to inheritance tax in the Autumn statement, try Telegraph Money’s calculator to see what kind of IHT bill you could expect. 

More than half of the country backs the abolition of inheritance tax, a poll carried out by YouGov has found.

There are hopes that reforms to inheritance tax could include reducing the headline 40 per cent rate, or simplifying the system so that all families can pass on £1 million tax free.

The news comes as Labour is planning a “devastating” multi-billion pound inheritance tax raid which could affect farmers and family business, reports senior money writer Charlotte Gifford.

The party is considering scrapping two exemptions – agricultural and business property relief – that currently allow farms and businesses to be passed down at death without their families paying the divisive 40pc charge.

Could a fuel duty increase be on the cards?

Despite hopes from Conservative colleagues that the Chancellor will announce tax cuts in the upcoming Autumn Statement, treasury officials are pushing Jeremy Hunt to hike fuel duty for the first time in more than a decade. 

Raising fuel duty by at least 2p would be needed to claw back the £5bn the Exchequer is losing each year after Rishi Sunak, who was then Chancellor, cut fuel duty by 5p in March 2022.

It is understood Treasury officials do not believe the move will be seen as a tax rise, as the duty will still be lower than when it was last raised in 2011, reports senior money reporter James Fitzgerald

It means that duty will rise to 55p a litre for petrol and diesel. VAT is also levied on fuel duty, compounding any rise in the tax.

Public spending increases set to be capped at 1% until 2029

Jeremy Hunt is expected to commit to increasing public spending by no more than 1pc until 2029, in a fresh challenge to Labour. 

Our political editor Ben Riley-Smith, reports that the Chancellor will recommit to tight spending plans in the Autumn Statement, that will map out his approach over the next six years.

Growing the amount spent on public services by just one per cent above inflation each year is much lower than the current level for this parliament, which is 3 per cent. 

It means that under Conservative plans unproctected departments, such as those that fund prisons and local adult social care, face real-term cuts in the years ahead.

It is even possible that Mr Hunt could choose a figure lower than 1pc, should the updated economic figures in coming weeks dramatically worsen.

Economic headroom may give cover for inheritance tax reform

Jeremy Hunt is continuing to defy calls from MPs within his own party for tax cuts in the Autumn Statement.

However, the Chancellor is said to be open to bringing forward plans for non-inflationary tax cuts next month if independent figures show he has enough headroom. The latest economic forecasts suggest he has £90bn to fund tax cuts or spending. 

Hunt is understood to be considering an inheritance tax cut as one possibility of a measure that would reduce the national tax burden but not pump money directly in to the system. 

The Telegraph, along with more than 50 Conservative MPs, is calling on the Government to abolish inheritance tax to save more middle class families from the death duty.

MPs have suggested that Mr Hunt could simplify the system to allow all families to pass on £1m tax-free. 

This would involve scrapping the £175,000 “residence nil-rate band” or “family home allowance”, which protects homes passed to direct descendants, and increasing the main £325,000 allowance to £500,000 instead.

Inheritance tax is the most unfair tax in the UK, a poll for The Telegraph found earlier this year. A recent poll from YouGov found that most taxpayers now want inheritance tax abolished.