Mr Shah said: “Abolishing the raise for anyone earning less than £50,000 would really help to satisfy the middle and lower incomes. It would be an easy win for Mr Zahawi’s first year as Chancellor .”
Increase personal allowances
Tax burden at highest point in 70 years and the Treasury’s five-year freeze on tax-free allowances and thresholds is largely to blame.
In March this year, Mr. Sunak froze tax thresholds to 2026 — including the personal deduction, base rate, capital gains tax and inheritance tax — before inflation skyrocketed.
The unpopular move has been labeled a “stealth tax” and reversing the freeze could give the new chancellor a quick win to turn the tide with a financially strained electorate.
Fuel and food
Mr Sunak fuel tax cut by 5 cents per liter in March in an effort to help motorists, but the relief has since been overshadowed by record-high gasoline prices. Calls have been made to further reduce duty to avoid a summer of chaos on the roads.
Mr Shah said: “The advantage of Mr Zahawi introducing another fuel cut is that it can be done overnight, he doesn’t have to wait for the start of a new fiscal year like the other tax changes. “
Rising bills at supermarket checkouts could also be on the agenda of a quick budget, Mr Etherington added.
He said: “The new chancellor could face calls to cut the cost of VAT on goods and services, but the concern with such a cut is that it could encourage more spending at a time of rising inflation.
“Even those looking for savings in their weekly shop may be disappointed by a VAT reduction, as it is not payable on goods such as meat, fish, fruit and vegetables. If the government really wants to support taxpayers in their weekly shopping, a food subsidy might be something to look into.”
Corporation tax
Zahawi has strongly hinted at reversing the planned corporate tax hike, which is set to rise from 19 percent to 25 percent next year.
Sunak had resisted pressure from Downing Street to scrap the turnout, but his successor has already paved the way for a turnaround.
This morning, Mr Zahawi said: “I want to be one of the most competitive countries in the world in terms of investment.”
He said the corporate tax was the “one tax” [investors] globally,” he adds: “I want to make sure we are as competitive as possible while maintaining fiscal discipline.”