Former foreign secretary Boris Johnson has pledged to almost double the threshold at which the 40 per cent tax rate threshold kicks in if he becomes prime minister.
As part of his bid to become leader of the Conservative Party, Johnson has told the Telegraph that he intends to raise the higher rate threshold from £50,000 to £80,000.
This move is estimated to cost nearly £10bn a year in lost revenues, which Johnson says he will fund from money currently set aside for a no-deal Brexit, and possibly through increasing employee national insurance payments.
The move could reduce income tax liabilities for around £3m people.
Johnson tells the Telegraph: “We should be raising thresholds of income tax so that we help the huge numbers that have been captured in the higher rate by fiscal drag.”
The first ballot of MPs to decide who will become prime minister is due later this week.
Few parliamentarians have declared their allegiance as yet, but a number of prominent figures have said which candidates they will be backing.
Work and pensions secretary Amber Rudd will support foreign secretary Jeremy Hunt’s campaign, telling the Times that “these are serious times and we need a respected statesman who Brussels will listen to, not more bluster.”
Scottish Conservative Party leader Ruth Davidson is supporting home secretary Sajid Javid’s bid, alongside other ministers including Caroline Nokes and Victoria Atkins.