Chancellor plans to slash taxes before the next election Chancellor Rishi Sunak is preparing to cut income tax by 2p in the pound or to slash VAT rates before the next election, reports the Times’ Steven Swinford. A cut to inheritance could also be on the cards. Mr Sunak has reportedly told officials to draw up detailed plans to reduce the tax burden, with the Chancellor said be in favour of cutting income tax over the next three years. The Conservatives are also said to be considering a manifesto pledge to do away with the 45p higher rate of income tax and a VAT cut centred on the headline rate of 20%. Plans to increase the threshold for inheritance tax are also under consideration, with the £325,000 level having been frozen since 2009. Mr Swinford says Mr Sunak is determined to shed his reputation as a “high-tax, high-spend” Chancellor, with Boris Johnson also aiming to be a tax-cutting Prime Minister. This comes with increases in corporation tax and national insurance set to take the tax burden to the highest level since the early 1950s. Reflecting on the potential cuts, Paul Johnson, head of the Institute for Fiscal Studies, said that cutting income tax after increasing national insurance to fund health and social care would be “indefensible”. He said: “To introduce the health and social care levy, which essentially only affects workers, then to cut income tax, which also benefits people who receive their income from rent, occupational pensions and other holdings, discriminates in favour of the wealthy.”