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What you want in the Autumn Statement

Abolishing inheritance tax and unfreezing income tax thresholds are top of the wishlists from our readers, reports Fran Ivens

Aily Telegraph

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

The freeze to income tax thresholds is dragging ever more middle earners into the 40pc higher rate of income tax. In 1991-92, just 3.5pc of UK adults paid the higher rate, according to the Institute for Fiscal Studies, but this figure is to rise to 14pc by 2027-28 when the freeze is forecast to end.

Unfreezing the thresholds was the top priority for readers who resoundingly picked it as the measure they would most like to see announced by Jeremy Hunt on Wednesday. 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 and a cut to income tax for middle earners all ranked highly on readers’ wishlists. A commitment to maintaining the state pension triple lock is also a popular choice, coming ninth overall in our ranking.

Currently the state pension is to rise by 8.5pc from April, fuelled by booming wage growth. Under the Government’s “triple lock” system, the state pension should rise in line with the highest of inflation, average wages or 2.5pc in April each year.

However, there have been rumblings that the policy is under threat amid accusations it is no longer viable in the current economic environment. And some readers agree with critics who think the lock should be unpicked. It is the 10th most popular policy choice overall.

Abolishing stamp duty land tax – the levy paid on property purchase – also comes high in readers’ priorities.

One of the few surviving measures from Liz Truss’s ill-fated mini-Budget is the doubling of the nil-band threshold of the levy from £125,000 to £250,000, but Telegraph readers want to do away with the levy altogether. One policy the Chancellor is understood to be considering is handing a stamp duty rebate to homeowners who improve the energy efficiency of their properties in the first two years after buying. Supporters in the Government believe the proposal could help reduce household energy bills and lower electricity consumption.

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

One reader, aged 72 and living in Greater Manchester, said: “History shows that reducing taxes encourages growth; corporation tax, income tax, inheritance tax – go for it.”

Another key theme to emerge was an awareness that the Tories need to do more to win back wavering voters.

A 42-year-old reader, based in Somerset, wrote: “The Conservative Party needs to do more than cut taxes, it needs to win back trust, fund local government and fund the NHS properly. Making work pay for low and middle earners and proper funding for childcare. They also need to sort out funding for social care.”

Cutting income tax for both high and low earners came within the top 10 requests for the Chancellor, as well as a call for reforms to public sector pensions.

Mr Hunt has repeatedly warned that there will be no tax cuts in the Autumn Statement at the risk of fuelling inflation.

However, better than expected economic data and falling inflation has led to speculation that Mr Hunt could gamble on some crowd-pleasing announcements. The Resolution Foundation believes this has left

Hunt with around £13bn of headroom to play with, double what he had in the spring.

Any cuts would be welcome news to Tory backbenchers who are keen for Mr Hunt to reduce the tax burden, which is currently at its highest since the Second World War.

The Telegraph has been urging the Government to abolish inheritance tax, which netted a record £7.1bn from bereaved families in 2022.

Currently, 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 Treasury is also understood to be weighing up the creation of a Great British Isa, which would result in a boost for savers and the economy.

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2023-11-18T08:00:00.0000000Z

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