Rishi Sunak is reportedly considering a reduction in income tax with a two-pence cut in income tax or National Insurance before the upcoming general election in an effort to incentivise work and gain popular support.

The Conservative Party has been facing pressure from senior members to consider a reduction in income tax, although the government is cautious due to concerns about persistent inflation.

According to the Sunday Telegraph, Sunak is pushing for a reduction in the basic rate of income tax by two pence or an equivalent decrease in National Insurance contributions.

This move aligns with his belief in cutting taxes to encourage individuals to engage in productive employment.

It is rumoured the Prime Minister wants to make tax cuts a key promise in his election campaign, as he had previously pledged to do so during his leadership campaign.

While some government sources confirm the intention to cut taxes and promise further reductions, a source from 10 Downing Street informed The Independent that there are currently no discussions regarding tax cuts. The government’s current focus is on addressing the issue of inflation.

A Treasury spokesman stated that they do not comment on speculations regarding tax changes outside of fiscal events.

Although Sunak and his chancellor, Jeremy Hunt, express their desire to reduce taxes, they emphasise that their immediate priority is to fulfil the five pledges, including halving inflation by the end of the year.

The chancellor’s first budget-read more here

Hunt has highlighted that lowering the country’s inflation rate is not an automatic process, as core prices have proven to be more resistant to decline than anticipated.

Sunak had previously announced a one-pence income tax cut for 2024, which would have reduced the 20 per cent rate to 19 per cent. However, this proposal was abandoned by Hunt after the disastrous mini-Budget during Liz Truss’s premiership.

During the Conservative Party leadership contest last summer, Sunak promised a further reduction of income tax to 16 per cent by the end of the decade. Nevertheless, the Institute for Fiscal Studies (IFS) cautioned that such a move would require an additional £19 billion per year.

It is reported that Sunak aims to enter the election campaign against the Labour Party with a “revived version” of his pledge to cut income tax during the next parliamentary term.

Additionally, senior Tories, including former chancellor Nadhim Zahawi, have urged Sunak to abolish inheritance tax. However, critics argue that such a step would primarily benefit the wealthiest four per cent of the population.

Suggestions have been made to eliminate exemptions favouring the rich and reduce the overall rate from 40 per cent.