The chancellor is not expected to raise the top rate of income tax, currently set at 45pc, because that would break the Conservative party’s 2019 election promise not to “raise the rate of income tax”. But Hunt’s allies said the idea of lowering the limit at which people pay the top rate is being actively considered ahead of his autumn statement on November 17. The Treasury declined to comment. Lowering the threshold below £150,000 is likely to anger some right-wing Tory MPs who believe in lower taxes to encourage entrepreneurship and higher economic growth. Hunt spoke of tough decisions on tax rises and public spending cuts for a £55bn fiscal consolidation that will fix the hole in public finances. But he hopes he will be able to increase state pensions and welfare benefits in line with inflation despite financial pressures on the government. The increase in revenue from the top income tax rate of 45 p.m. will highlight how Rishi Sunak is pursuing very different priorities than his predecessor Liz Truss. The Trust in September proposed scrapping the 45pc rate as part of the £45bn of unfunded tax cuts outlined in its much-criticised ‘mini’ budget. But the turmoil in financial markets that followed her plans forced her to abandon most of the tax cuts and hastened her demise as prime minister. Hunt is also considering plans to allow local authorities to raise council taxes by more than the current annual cap of 2.99 per cent imposed by central government, according to The Times newspaper. The cap has intensified financial pressures on councils at a time when inflation has hit a 40-year high of more than 10%. Recommended Officials confirmed the Treasury and Downing Street were discussing the plans, but said no final decisions had been made. The Chancellor is considering a number of measures for his Autumn Statement which could raise billions of pounds for the Treasury. It is considering extending the existing freeze on deductions and income tax thresholds until 2027-28. This would ensure that Britons pay more tax as their incomes rise amid high inflation. Hunt is also considering plans to extend the ‘nil rate’ freeze on inheritance tax until 2027-28.
