Liz Truss’ tax hike for families: Tory leadership contender pledges to offer £2,500 break to help those taking time off to care for loved ones if she becomes prime minister
- Foreign minister promises a tax reform if she becomes prime minister
- Ms Truss made the claims in the Channel 4 Conservative Leadership Debate
- She promised a £30bn tax cut as she tried to get her campaign going
- The MP said she wants to ensure that parents are not punished for caring for their children
Families would receive a tax break of up to £2,500 under plans being considered by Liz Truss.
The Tory leadership candidate today promises a radical overhaul of the tax system if she becomes prime minister.
She wants to make sure parents aren’t penalized for taking time out of work to care for family members. Couples with young children or caring responsibilities could share their personal tax deductions under the plan.
The Minister of Foreign Affairs pledged a tax cut bonanza of over £30bn tonight in a dramatic bid to make her campaign a success Boris Johnson back on track.
Liz Truss, pictured here during tonight’s Conservative leadership debate on Channel 4, has vowed to overhaul the tax system if she becomes Prime Minister
Ms Truss, pictured here alongside fellow Tory MP Tom Tugendhat during tonight’s debate, promised a tax cut bonanza of over £30bn
She vowed to do away with green taxes on energy bills, cancel a planned corporate tax hike, and reverse a national insurance hike.
And Miss Truss says she would take immediate action to “put money back in people’s pockets” as they grapple with rising inflation.
Speaking to the Daily Mail, she promises to go further by launching an immediate overhaul of the tax system when she comes in at number 10.
The Treasury would be tasked with investigating an ‘opt-in’ system that would allow members of the same household to share their tax deductions. The change could be introduced as soon as the budget next year.
Miss Truss said: ‘Families are a vital part of our lives and the crucial building block for a stable society. Not only do they take care of themselves, but they also build communities, charities and even businesses. We are going to review the taxation of families to ensure that people are not penalized for taking time to care for their children or elderly relatives.”
Ms Truss said the Treasury would be instructed to explore an “opt-in” system that would allow members of the same household to share their tax deductions. Pictured from left to right are Kemi Badenoch, Penny Mordaunt, Rishi Sunak, Liz Truss and Tom Tugendhat
In other developments:
- The leadership race came alive last night when Miss Truss and Rishi Sunak clashed over tax in the first TV debate;
- She pleaded with the increase in his national insurance and warned ‘you can’t tax your way to growth’;
- Suella Braverman urged MPs who had supported her to rally behind Miss Truss after she was knocked out of the race;
- Rival Penny Mordaunt tried to get rid of the argument over her “awakened” views on trans rights by insisting her stance was “simple and clear”;
- Scientists expressed concern that Ms Mordaunt supported the ‘fake’ treatment of homeopathy in the NHS;
- It turned out that Rishi Sunak, the frontrunner in the leadership race, lobbied privately for a green fuel tax last year;
- A leaked memo revealed that the ex-chancellor also “blocked” a review to cancel the TV license, despite claiming to be open to the idea;
- China’s largest official newspaper praised Mr Sunak for not taking a “very hard stance” on Beijing.
Miss Truss’ plans to allow households to share their personal tax deductions would boost the existing tax credit for married couples, first promised by David Cameron in 2005.
Currently, a member of a married couple earning below the £12,570 income tax threshold can transfer £1,270 of their allowance to their spouse, reducing their tax bill by up to £252 per year.
The review proposed by Miss Truss would look at eligibility for all cohabiting couples, while dramatically increasing the tax benefit.
Treasury officials will consider allowing people to transfer their full personal allowance of £12,570 to a partner.
This would add up to £2,514 per annum per pair.
Stay-at-home parents or part-time working parents are among the top winners. At an online hustings yesterday, Miss Truss offered a triple tax cut of £32.7bn if she became prime minister. She would reverse the increase in national insurance introduced by Mr Sunak in April. “It’s even more of a mistake now that we’re facing such strong economic headwinds,” she told the Conservative Home event.
She also announced a temporary suspension of the green energy tax, which would cut £153 on energy bills.
Miss Truss added: ‘I wouldn’t raise corporate taxes either because it’s vital that we attract investment in our country.’
The increase from 19 percent to 25 percent next year is expected to bring in more than £16 billion a year, while reversing the increase in national insurance would cost £12.5 billion and the abolition of green taxes at 4.2 billion pounds is estimated.
Mr Sunak, who has been criticized for his high spending and high taxes during the pandemic, argued at the same event that he would only make tax cuts if inflation was under control.
Laura Suter, head of personal finance at AJ Bell, said Ms. Truss’s tax break proposal would help families but “add complexity to an already very complex tax system.”