A new tax raid on the pension contributions of wealthy voters is being pondered by George Osborne after he threw out the concept of a "wealth tax" based on bigger council bills for top end homes.
Having already vowed to deliver greater equilibrium in his cuts to achieve a further £10bn of benefit savings by 2015-16, the Chancellor is looking at ways to slap a raft of new taxes on the rich.
And while those close to Osborne denied to The Financial Times that such an approach is utterly removed from any deal struck with his Liberal Democrat coalition partners, the hunt for fresh revenue streams is building to a fiscal crescendo as the Autumn Statement deadline of 5 December, draws ever closer.
Before that key deadline, the Chancellor still has one more to think about - submitting his final proposals to the Office for Budget Responsibility by 28 November.
Osborne hooked up with his top coalition colleagues yesterday to explore the various tax pathways available to him.
In his 2010 Budget, the Chancellor slashed the maximum annual pension contribution exemption from tax from £255,000 to £50,000.
Many now believe he will go for even deeper cuts. By setting a new threshold of £40,000 he could generate an additional £600m of revenue, while even more ruthless deduction in the tax threshold to £30,000 would create some £1.8bn of cash flowing into the Treasury.
By lowering the annual cap even further, would dramatically help Deputy PM Nick Clegg’s plan to up the income tax threshold to £10,000.
Currently, the UK’s highest earners paying the top rate of 50% can claim up to 50% tax relief on their pension contributions, a deal which means that for every £1 pumped into pension pots, the government adds an extra 50p.
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