Javid considering tax raid on higher earners
Sajid Javid: announces Budget next month
Chancellor Sajid Javid is said to be considering a tax raid on higher earners in his 11 March budget.
Mr Javid is looking at a number of options to ease pressure on strained public finances, according to sources at the Treasury.
His proposal is likely to prove controversial with colleagues, according to the Financial Times, especially among those who believe it will be a betrayal of promises to cut taxes.
The Chancellor is set to introduce long-considered plans to reform pension tax relief and possibly a “mansion” tax.
The current system of pension reliefs costs the Treasury around £40bn a year and mainly benefits richer people as those who save into a pension receive tax relief at the same rate as their income.
Mr Javid is considering cutting the rate, from 40% to 20%, which would raise more than £10bn annually for the Treasury.
A plan to cut corporation tax cut from 19% to 17% has already been abandoned by the Prime Minister as he seeks to free up extra funds for the NHS and other commitments to boost spending on public services.
A raid on higher rate tax payers, mainly concentrated in the south east, will also be a reward to those in northern constituencies who helped him win power.