Kwasi Kwarteng could be set to deliver £30billion worth of tax cuts this week as part of his "mini Budget" as the Government comes under pressure to tackle the cost of living.
The new Chancellor is reported to be considering a reversal of the National Insurance hike - with reports suggesting workers will benefit from this from November.
The rate at which you pay National Insurance contributions was raised by 1.25 percentage points in April - up from 12% to 13.25%.
The increase was designed to help pay for NHS backlogs and social care.
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Mr Kwarteng could also reportedly use his fiscal statement to confirm that next year’s planned hike in corporation tax - from 19% to 25% - will not go ahead.
The Mirror has reported that two million low income couples could be in for a £2,500 boost as part of the “mini Budget” as well.
Prime Minister Liz Truss wants to allow the transfer of all personal tax allowances between married couples and civil partners where one earns below the £12,570 tax free threshold.
At the moment, a lower earner can transfer £1,260 of their “personal allowance” through marriage tax allowance – saving £214 tax after adjustments.
The new Chancellor is also reported to be considering pushing forward plans to cut income tax by 1p - giving millions of workers more cash in their pockets.
Income tax is a tax you pay the Government based on your yearly income, or your profits if you’re self-employed.
The basic rate is currently 20p and this is set to drop to 19p in 2024 - but reports suggest Mr Kwarteng could fast-track this date.
The 1p reduction was first announced by former Chancellor Rishi Sunak in his Spring Statement in March 2022. At the time, Mr Sunak said the cut would come into force in two years' time.
Mr Kwarteng could make an announcement on bringing forward the cut to income tax this Friday as part of a wider £30billion package, reports the Daily Mail.
If an announcement is made this week, the new rate might not come into effect straight away. The new Chancellor may also choose to wait for the full Budget later this year to confirm any cut to income tax.
Goldman Sachs, the US investment bank, said it expected Mr Kwarteng to go further by cutting 2p from income tax.
For most people, the personal allowance before you start paying income tax is £12,570.
Basic rate taxpayers then pay 20p on every £1 you earn between £12,571 and £50,270 a year.
Income tax is separate to National Insurance, which is what you pay to qualify for certain benefits and the state pension.
