Rishi Sunak’s team has warned cutting VAT by 5% across the board would be “regressive” and cost tens of billions of pounds amid reports Liz Truss is considering the move as a “nuclear” option.
It is one of a series of possible strategies to ease the cost-of-living crisis being drawn up by the Treasury for the new prime minister to look at when they take office, according to The Sunday Telegraph.
The newspaper said the 20% headline rate of VAT could be cut by up to 5%, saving the average household more than £1,300 per year. But a source from Rishi Sunak’s campaign said this would be “incredibly regressive” and cost north of £30 billion.
