Chancellor Rishi Sunak is expected to ditch £10bn plans from his predecessor Sajid Javid to raid higher-rate pension tax relief.
The Times reported Conservative MPs are opposed to the move. Iain Duncan Smith described it as a “tax on aspiration” while David Davis said raising taxes further would be “a moral disgrace and an economic farce”.
Javid had reportedly been considering halving the 40% relief currently enjoyed by higher rate taxpayers in an effort to raise an extra £10bn annually. But he resigned less than a week after the plans were first reported.
Despite only being appointed chancellor less than a fortnight ago, Sunak is set to deliver the budget on 11 March. He must submit his final policies to the Office for Budget Responsibility this week.
The Times reported Sunak is still considering an end to the fuel tax freeze resulting in a 2p raise per litre of petrol or diesel if it were to raise in line with inflation.
He is also considering loosening fiscal rules by relaxing the commitment to balance the budget by a leeway of plus or minus 1%.
The Resolution Foundation forecast this would give the government a further £36bn to play with by the end of the parliament.
