The Chancellor is facing mounting cabinet pressure to cut taxes after new figures revealed the Treasury has made over £94billion in additional tax revenue over the past year.
The ONS reports that the government received £620billion in tax receipts between March 2021 to March 2022, up 18% when compared to the previous year.
Corporation taxes levied at businesses have risen by over £10billion alone over the past 12 months, while VAT receipts have jumped by £25billion.
The record tax take comes at a time when inflation is running at a 30-year high and households and businesses are being crippled by rising costs.
Tax cuts floated
Last night it emerged that the members of the UK cabinet have lobbied for tax cuts in response to the figures.
While colleagues suggested reducing the cost of childcare and scrapping MOTs to help ease the pain of rising bills and prices, Kit Malthouse, the policing minister, argued that reducing the tax burden would be the best way to help struggling families.
His view, reported by the Daily Telegraph, is understood to have received support in the room and was backed by former Cabinet ministers on Tuesday night.
“We are a party and a government of low taxation,” said Mr Malthouse, according to one Cabinet colleague present who recounted the intervention to The Telegraph.
“The quickest way of actually regenerating the economy and getting retail activity and job creation back on course is by reducing the tax burden, not increasing it.”
However, the Chancellor is understood to have argued that further moves on tax would have to wait until the autumn Budget.
Mounting pressure
Danielle Boxhall, of the lobby group Taxpayers’ Alliance, said: "With inflation rising, the Chancellor's tax break freeze is effectively a stealth tax on unsuspecting taxpayers already facing the highest tax burden in 70 years.
"The Treasury should link thresholds with inflation or wage growth to avoid fiscal drag, and give taxpayers and businesses some much-needed respite."
James Smith, research director at the Resolution Foundation, said the record levels meant the Chancellor “can have little reason not to provide much-needed policy support to families as they deal with the higher inflation and energy bills that are now hitting their finances”.
Managing finances ‘sustainably’
On Sunday, Labour joined the SNP in calling for an emergency Budget to ease the cost of living crisis, with Sir Keir Starmer repeating calls for a North Sea windfall tax.
However, Mr Sunak said in a statement said he must manage the country’s finances sustainably to avoid saddling future generations with further debt.
“Thanks to the action we’ve taken, the economy is recovering and our public finances are improving – allowing us to invest in vital public services, help the hardest hit with a £22 billion package of support and get people into work,” he said.
“Public debt is at the highest levels since the 1960s and rising inflation is pushing up our debt interest costs, which mean we must manage public finances sustainably to avoid saddling future generations with further debt.”