The Conservative Growth Group, which was founded by staunch Liz Truss supporters, is calling for a shake-up of the tax system to keep senior doctors in work and an overhaul of IR35 self-employment tax rules.
Ms Truss herself considered reforming the taxes, pledging to look at changing both the tax rules for doctors and the self-employed when she was running for leader of the Tory party last summer.
The plans have been drawn up by veteran backbencher and Trussite Sir John Redwood and also include calls for an increase to the threshold by which small businesses can earn before they must register for VAT.
Sources within the group, which boasts more than 50 Conservative MPs, insist the measures will “pay for themselves by growing the economy”.
Senior Tories have been pushing for ministers to reform the so-called “Doctors’ Tax” for some time, warning it is forcing senior medics out of the profession due to the punitive tax rates it places on their personal pensions allowance.
MPs want to see an end to the current “pensions’ trap”, which they warn is leading to experienced doctors having to reduce their hours or leave the NHS entirely due to them being hit by hefty tax bills.
The ‘trap’ sees doctors paying 55% tax on their pension once it hits a certain threshold, meaning it is more cost effective for them to retire than to continue working.
They are also calling for changes to the IR35 rules, which they believe are forcing self-employed workers to pay too much tax and therefore strangling entrepreneurship in the UK.
Similarly, the group believes that by raising the £85,000 threshold at which small businesses must register for VAT, it would reduce bureaucracy for business owners.
i understands Ms Truss will broadly support the plans being put forward by the group, with an ally of the former prime minister saying she is “likely to get behind any policies that are developed by the group”.
It comes amid growing concerns among the Conservative benches that next week’s Budget will fail to set out any practical proposals to grow the economy.
Treasury sources have already ruled out cutting corporation tax, insisting that any fiscal headroom is only likely to stretch to cover cost of living support, such as energy bills and fuel duty.
Despite this Jacob Rees-Mogg suggested there was a “good chance that corporation tax won’t rise in the Budget”.
“I think that may be the rabbit out of the hat,” he told GB News.
He added: “People’s money is their own government has no money. It’s always taxpayers’ money, and low taxes are the right thing to do.
“It creates prosperity for all, people spend their own money better than the Government spends it for them.”