Rishi Sunak under pressure to cut taxes – 5 major things he could do next to help families in cost of living crisis

RISHI Sunak is considering what to do next to help families struggling to make ends meet.

The Chancellor has several levers he can pull, including tax cuts and increasing benefits like Universal Credit. 

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He is expected to reveal a fresh package of support in the summer to ease the pain of crippling price and bill hikes.

But Tory MPs are openly demanding action now and even joining forces with Labour on some policies.

Mr Sunak is walking a tightrope of trying to protect squeezed Brits without ripping a bigger hole in the public purse.

Blaming global shocks, last night he warned: “There is no measure that any government could take, no law we could pass, that can make these global forces disappear overnight.”

However Treasury officials have been ordered to draw up a range of measures – here’s what they could include.

INCOME TAX CUT

The Chancellor is considering wiping a penny off income tax earlier than scheduled so workers can start to keep more of their cash.

Reducing the basic rate from 20p to 19p is planned for 2024, and would save millions of people hundreds of pounds a year.

Treasury insiders say they will crack on with the cut as soon as the public finances improve, but are not holding out hope for the autumn budget.

Economists also argue an income tax cut would disproportionately benefit the richest and do nothing for out-of-work Brits also struggling.

BENEFIT BOOST

Tory MPs have begun echoing Labour’s calls for Mr Sunak to increase Universal Credit payments.

They want him to restore the £20-a-week uplift that was axed at the end of the pandemic.

Benefits were also increased by only 3.1 per cent in April, despite inflation soaring to 9 per cent. 

Mr Sunak stresses that last year he cut the taper rate to let claimants keep 8p more for every pound they took.

But now his own backbenchers say more needs to be done.

COUNCIL TAX REBATE

Not everyone welcomed the £150 council tax rebate offered by Mr Sunak back in April.

The rebate only applied to houses in bands A to D whereas the largest properties were exempt.

Because the bands are based on 1950s property prices, some poor people living in bigger houses are ineligible.

Expanding the rebate – or even making it more generous – is being considered carefully.

VAT CUT

Rather than cutting income tax, Mr Sunak could cut VAT in a bid to fire up the economy.

A 1 per cent cut would cost around £7billion and is still fairly regressive as richer people spend more money.

However it would be an easy lever to pull and would help out of work Brits rather than just workers.

WINDFALL TAX

Treasury officials have been examining the case for taxing the eye-watering profits made by oil and gas giants.

North Sea energy firms have never had it so good – capitalising on sky-high demand to claw in billions more profit.

Labour and a smattering of Tory MPs are calling on Mr Sunak to raid the profits and use the money to ease bill pain for ordinary families.

It is understood the Chancellor is keen, but is being blocked by No10 who regard a tax grab as un-Conservative.

This post first appeared on thesun.co.uk