Tory revolt as tax take is set to soar to £1trillion sparking pressure

Tory revolt grows with demands for Rishi Sunak to go further on his pledge to cut taxes with revenues set to soar to £1trillion as MPs say families need more help to deal with the spiralling cost of living

  • Tory MPs demanded Chancellor Rishi Sunak go further on pledge to cut taxes
  • Total revenues flowing into the exchequer forecast to reach a record £1.05trillion
  • Tax burden will reach its highest level as a portion of national income since after the postwar era
  • Tory MPs demanded the Chancellor go further on his pledge to cut taxes tonight as figures revealed the Treasury is set to rake in £1trillion a year.

    Total revenues flowing into the exchequer are forecast to reach a record £1.05trillion in 2023/24 – just ahead of the next election – up from £899.5billion this year and the equivalent of £42,000 per household.

    The tax burden will reach its highest level as a proportion of national income since Clement Attlee’s postwar Labour government.

    Le figure, in documents published by the Office for Budget Responsibility (OBR), will pile pressure on Rishi Sunak to reduce taxes.

    The Chancellor was labelled a ‘fiscal illusionist’ by the Institute for Fiscal Studies (IFS) yesterday for claiming to have cut taxes when in he is ‘presiding over a very big increase’.

    Many Tory MPs want Mr Sunak to go much further, notably because he had been given a £50billion ‘windfall’ from higher-than-expected growth and tax revenues in the current financial year

    Many Tory MPs want Mr Sunak to go much further, notably because he had been given a £50billion ‘windfall’ from higher-than-expected growth and tax revenues in the current financial year

    This is largely because of Mr Sunak’s decision to freeze tax thresholds rather than increase them with inflation, meaning more are pushed into higher bands.

    The Resolution Foundation thinktank pointed out that this means only a tiny proportion will save money from the Chancellor’s pledge to cut the basic rate by 1p before the next general election.

    Many Tory MPs want Mr Sunak to go much further, notably because he had been given a £50billion ‘windfall’ from higher-than-expected growth and tax revenues in the current financial year.

    Former Brexit secretary David Davis said the Chancellor should have cancelled April’s national insurance hike, while Richard Drax told the Commons: ‘I just want to say to the Treasury bench, with the cost of living spiralling and taxes at the highest for 70 anni, can I urge them to go further? As they know full well, lower taxes generate more cash.

    The tax burden will reach its highest level as a proportion of national income since Clement Attlee’s postwar Labour government.

    The tax burden will reach its highest level as a proportion of national income since Clement Attlee’s postwar Labour government.

    ‘Low taxes are a force for good both for the individual, who is far better placed to decide where to spend their money, and for the private sector, which can better invest in their businesses, employ more staff and sustain a profit.’

    Andrew Bridgen added: ‘You can’t tax your way to prosperity and it’s not the way to grow the economy. This is the highest burden since World War Two.

    'Il problema è, inflation is set to hit double digits and many households will tighten their belts and cut down their spending.’

    Mr Sunak has announced a string of tax rises since becoming Chancellor in February 2020 – just before Covid-19 struck – including hiking corporation tax from 19 per cento a 25 per cent from April 2023, which will raise £17.2billion a year.

    National insurance will go up by 1.25 percentage points for employers and employees next month – something the Daily Mail has campaigned against.

    Some of these hikes were offset by the Chancellor’s tax cuts this week but the IFS said the proposed cut in the basic rate of income tax ‘gives back only about half of the additional windfall’ Mr Sunak will get from freezing the thresholds. Economists also urged Mr Sunak to slash taxes.

    Mark Littlewood, director at the Institute of Economic Affairs, disse: ‘The proportion of national income taken by tax is now at the highest level since Clement Attlee. We’re at the point where we have hit our taxable limits. What you’ll see is people retire early, not go for promotions or work overtime, or even take jobs in Singapore or New York. The Government is trying to please too many people.’

    According to the OBR, total revenues will top £1trillion for the first time in 2023/24.

    These are made up mainly of taxes but include other receipts, such as selling off the Government’s stake in NatWest and dividends from investments.

    Nel 2023/24, the tax take will total £948.1billion, with the remainder of the £1.05trillion coming from these other receipts.

    Nel 2025/26, taxes alone will top £1trillion, taking the tax burden to 36.3 per cent of GDP, the highest since the late 1940s.

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