Tax rules set to change in March as government aim for election boost

Downing Street officials are thinking about completely scrapping inheritance tax in three months’ time

The Tories are considering scrapping inheritance tax and helping first-time buyers. Ministers are looking for a General Election boost and thinking about revisiting the tax cut idea that last surfaced before Jeremy Hunt delivered his Autumn Statement in the Commons in November.

Downing Street officials are thinking about completely scrapping inheritance tax in three months’ time, according to the Telegraph, as the prime minister ordered a “gear change” on tax. According to the Institute for Fiscal Studies, the wealthiest 1% of individuals in the UK would receive almost half of the benefit of ditching inheritance tax.

John Stevenson, chair of the Northern Research Group of Tory MPs, representing 30 to 40 members in red wall seats, said in November: “I am all for reforming tax and inheritance tax needs reforming. However at this time any tax cuts should be aimed at helping businesses or the lower paid.”

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Jonathan Gullis, a former minister and the MP for Stoke-on-Trent North, said: “While long term this [inheritance tax] should be eventually abolished, now is not the right time for this tax cut. Instead, we should be looking at cutting the basic rate of income tax [and] increasing the 40p tax threshold to help families really feeling the pinch.”

He added that Hunt should “go for growth” by increasing tax breaks for small businesses and the self-employed. Senior Labour figures, including four ex-work and pensions secretaries, wrote to Mr Hunt urging him to back away from a fresh raid on the benefits budget.

“We believe that the social security system should provide the vital safety net it was set up for in the postwar settlement,” wrote the group, which includes Alan Johnson, David Blunkett, Andy Burnham and Labour MP Debbie Abrahams. “Some may argue that inflation will decrease over the next few months, but this ignores the real term cuts in working age social security support since 2011.”