Rishi Sunak is considering a tax cut for the 5 million highest earners and reducing stamp duty in an attempt to ease the pressure on his leadership after two historic byelection defeats, it has been reported. The Conservatives may raise the 40% income tax threshold after Labour’s victory in Mid Bedfordshire, Nadine Dorries’ former seat. It was the largest majority to be overturned at a byelection. Labour also won Tamworth in Staffordshire after the second biggest byelection vote swing from the Tories to Labour since the second world war. The Daily Telegraph reported that surveys have been carried out by Downing Street to ascertain which tax reduction could give the party the biggest political pre-election boost with the 2024 spring budget considered the earliest it could be announced. Sunak froze income tax thresholds in 2021 for six years while chancellor. The Conservatives are also planning to reduce stamp duty for their general election manifesto next year if the economy has strengthened, the Times reported. A source told the newspaper the Tories are planning to either cut stamp duty or abolish inheritance tax. A senior Tory told the Times that reducing stamp duty would be “aspirational” and improve the economy in addition to attracting middle-class voters who had left the party. Stamp duty in England and Northern Ireland is now 5% for a main residence bought for between £250,001-£925,000, and for more expensive properties, this rises to 10% for sums paid between £925,001-£1,500,000. Meanwhile, the pressure to announce tax cuts before the next election has increased after figures showed government borrowing was lower than expected last month on the back of a large drop in the Treasury’s debt interest bill and strong tax receipts. Official figures showed that public sector net borrowing was £14.3bn last month, lower than the £20.5bn that had been forecast by the Office for Budget Responsibility. • This article was amended on 24 October 2023 because 10% stamp duty is levied on the sum paid between £925,001-£1,500,000, not on the whole property price as an earlier version suggested.