Various candidates to succeed Boris Johnson as a UK Prime Minister, - like Liz Truss, Penny Mordaunt or Tom Tugendhat - are lining up billions of pounds of tax cuts to persuade the Conservative Party members, who will pick a new person for the position in the next weeks.
Learn more about how this could affect you in the future below!
Rishi Sunak won the biggest backing from Conservative lawmakers on Wednesday in the first vote to choose who will succeed Boris Johnson as party leader and UK Prime Minister, while two more rivals - Nadhim Zahawi and Jeremy Hunt - were eliminated.
Sunak, whose resignation as finance minister last week helped precipitate Johnson’s fall, secured support from 88 of the party’s 358 Members of Parliament, with junior trade minister Penny Mordaunt second with 67 votes and Foreign Minister Liz Truss third with 50. Meanwhile, lawmaker Kemi Badenoch received 40 votes, Tom Tugendhat received 37 and Suella Braverman received 32.
After Boris Johnson lifted the overall tax burden to its highest level since the 1940s to rebuild the public finances after the pandemic, UK Prime Minister hopefuls are all promising to ease the tax burden.
It's important to notice that abandoning April's Payroll Tax increase will cost £18 billion, while throwing away the increase in Corporation Tax from 19% to 25% will cost £16 billion and cutting Income Tax by 1% would cost around £6.5 billion.
Rundown of the Tax Policies of the Candidates
1) Rishi Sunak
Rishi Sunak has been by far the most cautious candidate on tax in the early days of the race, frozing the thresholds for personal tax which dragged more workers into higher rates, as well as hiking Corporation Tax and National Insurance.
Sunak then reversed part of the National Insurance rise by raising the threshold at which it is paid and pledged to cut Income Tax in 2024, if the public finances allowed.
While being criticized for being "a high tax Chancellor", Rishi Sunak warned voters about “comforting fairy tales that might make us feel better in the moment but will leave our children worse off tomorrow.”
2) Penny Mordaunt
Penny Mordaunt commited to a 50% cut in VAT on fuel, saving £10 when filling the average family car. She also said: “To increase revenues and growth for the nation, cut taxes. To improve options and opportunity for individuals, cut taxes. To balance the state and generate wealth funds for future generations, cut taxes.” This will represent a £5 billion cut in taxes.
3) Liz Truss
The no. 1 promise made by the Foreign Secretary is to “start cutting taxes from day one”. Her plan is to reverse Sunak's National Insurance rise and lower Corporation Tax. Besides this, Liz Truss plans to cut fuel duty by more than the 5p per liter reduction already in place. With this, Foreign Secretary Liz Truss plans to cut £34 billion in taxes.
4) Kemi Badenoch
While Kemi Badenoch is unlikely to become the next Prime Minister, it doesn't mean she has nothing to say. Her official campaign speech on Tuesday stressed her desire for “free markets and limited government”, defending lower taxes “to boost growth and productivity” but also accompanied with “tight spending discipline.”
5) Tom Tugendhat
Tom Tugendhat, like other candidates, has promised to reverse the recent National Insurance hike, but has also blasted his opponent’s corporation tax cuts as “not realistic". In total, Chairman of the Foreign Affairs Committee Tom Tugendhat plans to cut £18 billion in taxes.
6) Suella Braverman
The cost of living crisis was also noted by the attorney general Suella Braverman, who would help households with “rapid and large tax cuts.” She would also take the UK out of the European Convention on Human Rights, maintain a firm line on migration and push through changes to the Northern Ireland Protocol.
Further rounds of voting will take place on Thursday and, if needed, next week, until just two candidates remain.
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