Cut income tax, starting with the lowest earners. Use demonstrated inheritance tax revenue, apart from the share that smooths receipts through the Sovereign Wealth Mechanism, to reduce the tax on labour income. The incentive to earn, build, invest and create during a lifetime gets stronger: you keep more of what you make.
Current Assessment
Income tax and National Insurance together raise £475bn a year, 55% of the tax HMRC collects, all of it dependent on wages and other earnings. Until 14 October 2026 this claim proposed abolishing income tax once inheritance tax revenue matched that £475bn. That rested on an annual wealth transfer of £200–400bn now, rising to £350–450bn at the boomer peak, which no source supports. The best available estimates are roughly £100–115bn a year now, so even a 95% tax on every pound passed on would replace only about a fifth of income tax and NI, and parity can't be reached. The claim is now what the arithmetic supports: a substantial, permanent income tax cut, sized to proven inheritance tax revenue and given to the lowest rates first. Under the two-stage transition claim, income tax isn't cut during Stage 1, and is cut only as that revenue arrives.
Evidence
Income tax and National Insurance together raise £475bn a year, 55% of the tax HMRC collects, all of it dependent on wages and other earnings.1 Transfers of wealth between generations, at death and in lifetime gifts, are worth roughly £100–115bn a year. The Resolution Foundation, using HMRC data, put estates passing on death at £87bn in 2014–15 and expects inheritances to double over the next two decades, and Cebr's projection for Kings Court Trust puts total transfers at £115bn in 2027 and £355bn by 2047 in cash terms.2
This is the project's own arithmetic, not a finding any single source states. A 95% tax on every pound passed on, with no threshold, no spousal exemption, no avoidance and no spending down, would raise roughly £95–110bn a year at today's values, about a fifth of the £475bn. Transfers may grow two to three times by the 2040s in cash terms, but income tax and NI grow in cash terms too, so the share hardly changes, and actual revenue will come in below the ceiling. A tax on transfers between generations can pay for a large cut in the tax on work, but it can't replace it.
Spend the inheritance tax revenue on public services instead of tax cuts; use it to cut every income tax rate evenly; use it to cut National Insurance instead of income tax; or this claim's choice, cutting income tax from the bottom up. Anything beyond that would have to come from the other taxes in Revenue Architecture (land value tax, corporation tax reform, carbon pricing, a financial transaction tax), or income tax simply stays.
Giving the revenue back as an income tax cut, instead of spending it, reflects a judgement that moving the weight of the tax system from earning to unearned inheritance is worth doing for its own sake, not only to raise money. Cutting the lowest rates first reflects a judgement that the people with least to inherit should gain first. A reader who would rather spend the revenue on public services, or cut the higher rates first to sharpen the incentive to build, isn't wrong about the evidence; they weigh it differently.
Income tax is cut only as fast as inheritance tax revenue is proven, starting with the lowest rates, with each percentage point of cut matched to revenue already received. It doesn't follow a fixed calendar and isn't paid for by borrowing against revenue that may not arrive. The test comes from the 95% inheritance tax claim: if Stage 2 revenue falls short of its projections, the cut is smaller, but no public service loses its funding, because no cut runs ahead of the revenue.
Assumptions
- The size of the cut depends entirely on the 95% inheritance tax claim. At the theoretical ceiling it's about a fifth of today's income tax and NI. In practice it's less, by however much avoidance, exemptions and spending down reduce the base.
- No cut runs ahead of the revenue. The claim's protection against a shortfall is the order of events, not borrowing. If a future government cuts income tax before the receipts are proven, that protection is gone.
Cross-Pillar Relationships
| Pillar | Connection |
|---|---|
| 95% Inheritance Tax | Sets the size of this claim's income tax cut; see the Numbers Ledger in Revenue Architecture §8.1 for the corrected ceiling. |
| Two-Stage Transition | Sets when the cut begins: not before Stage 2. |
Challenges
No challenges submitted yet. Submit one via Challenge a Claim.
Update History
- 23 October 2026: Claim wording changed (new version): "every pound" of inheritance tax revenue replaced with revenue "apart from the share that smooths receipts through the Sovereign Wealth Mechanism", matching the Sovereign Wealth Mechanism claim, which sends part of Stage 2 receipts there. Supporter count resets. Also rewritten in plain prose.
- 14 October 2026: Claim changed from "Abolish income tax entirely" to "Cut income tax, lowest earners first". The abolition case depended on an annual wealth transfer of £200–400bn now, rising to £350–450bn, which no source supports. Corrected figures (roughly £100–115bn a year now) put full replacement of income tax out of reach even at a 95% rate on every pound. Anyone who backed the earlier version backed abolition; this version proposes a cut.