Liz Truss plans to cut taxes further in the new year

Liz Truss is planning to continue her tax-cutting spree in a new year Budget that will include further reductions in income tax, and discounts for savers and child benefit claimants.

Treasury officials are drawing up a list of “pinch points” that discourage people from earning more money by imposing high rates of tax on extra earnings, as part of a wholesale review of the tax system.

Up to 1.6 million savers could benefit from a review of the lifetime and annual allowances on pension pots, which currently can encourage employees to take early retirement to avoid the “tax trap”.

Workers who earn more than £100,000 would be given a full income tax personal allowance, under plans that amount to a tax break worth up to £5,000 a year to the highest earners.

And ministers are considering abolishing a charge for those who earn more than £50,000 and claim child benefit, over concerns it discourages households from earning more.