No 10 moves towards VAT cuts for millions of Brits as cost of living crisis rages
Downing Street is proposing to reduce value-added tax in an effort to ease the cost of living.
The Prime Minister’s chief of staff Steve Barclay suggested reducing the 20% headline rate of tax temporarily, The Times reported on Thursday.
He said the temporary cut would bring down the tax bill for millions across the UK as the country faces 40-year high inflation at 9.1% and battles a cost-of-living crisis.
However these proposals have worried Treasury officials with concerns it might overstimulate the economy.
Mr. Barclays reportedly first raised the VAT cut proposals 2 weeks ago with the Treasury and called them “deflationary”.
The Times said that Boris Johnson, in his letter to party lawmakers on the day of the confidence vote, said efforts would be made towards “reducing the biggest single household outgoing of all — the tax bill. It must come down, and it will, because that is the best way to deliver the growth we need.”