The Conservative party leadership contest heats up as the Prime Minister hopefuls set out their stance on tax
Conservative party leadership contenders Rishi Sunak and Liz Truss went head-to-head in a televised debate on Monday 25th July, which saw each candidate set out their vision for the future direction of the party and the country, along with their stance on tax.
The debate was the first of a series, all due to take place before Conservative party members begin voting for their next leader, with the winner due to be announced by 5th September.
Party calls for a return to “proper conservative policies”
Conservative MP David Davis has recently called for the end of IR35 and a return to “proper conservative policies: low tax, low regulation”, suggesting scrapping recent changes to National Insurance and planned increases in Corporation Tax.
As such, the party leadership contest will be of particular interest to contractors and the self-employed. With IR35 a source of continued frustration and further tax reform on the horizon, the UK’s independent workforce will be particularly affected by the tax policies put forward.
In a leadership contest which increasingly looks like it will be decided on the merits of each candidate’s position on tax, Sunak and Truss are positioned as high-intervention and low-intervention, respectively.
Where does Rishi Sunak stand on taxes?
Rishi Sunak has promised that he will cut taxes when he can but has insisted that, for now, keeping rates as they are is fiscally prudent. So far, the former Chancellor has played up to his direct experience working in the Exchequer.
Having introduced the latest rise to NICs this year, it seems unlikely that he would scrap them. In his campaign launch speech, Sunak said: “It is not credible to promise lots more spending and lower taxes”, and “once we’ve gripped inflation, I will get the tax burden down.”
However, In his most recent and final spring budget as Chancellor, Mr Sunak failed to address IR35, which will be a major concern for contractors.
Where does Liz Truss stand on taxes?
Liz Truss, on the other hand, has positioned herself strongly on the side of tax cuts. Speaking in The Times, Truss has promised “tax cuts, [and] getting a grip on public spending.”
Having opposed both the NICs increase and the planned increase in Corporation Tax, Truss has suggested that she would also review business rates.
The consensus is that her tax position could appeal to freelancers and contractors, as well as to the broader Conservative party membership base – and indeed, she is seen as the frontrunner in the contest, with a YouGov poll indicating that Truss holds a 24-point lead over Sunak.