Liz Truss has been confirmed as the new leader of the Conservative party and will take over from Boris Johnson as the next Prime Minister.

The leadership contest saw Truss receive 81,326 votes, ahead of Rishi Sunak, who received 60,399, amid an 82.6% turnout among 172,437 eligible voters from the Tory membership.

She will come under immediate pressure to announce new plans to tackle the cost of living crisis, amid record levels of inflation and spiralling energy bills for households across the UK.

According to those close to Truss within her campaign, she has already spoken of proposals for a regulatory shake-up in the financial services sector, with plans to merge the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA) and the Payment Systems Regulator (PSR) into a single body on the table.

Among the rumoured changes for the consumer finance space, the new Prime Minister’s plans could see a reversal of the national insurance hike, a VAT cut from 20% to 15%, the removal of green levies on energy bills, as well as a review of the current inheritance tax (IHT) system.

Head of tax at Evelyn Partners, Sian Steele, commented: “As the cost of living crisis continues, with energy bills set to increase from October and rising inflation, the Conservative leadership debate has focused on tax cuts and spending plans.

“Truss’s campaign has been marked by big tax pledges, which she is expected to announce formally later this month. In the last hustings, she also commented that the tax system is too complicated, and that the number of loopholes needs to be reduced.

“A headline announcement, which will be welcomed by many, is her plan to reverse the rise in national insurance contributions. This 1.25% rise was only implemented in April by then Chancellor Rishi Sunak, with an increase in the threshold for payment from £9,880 to £12,570 from July. It is not clear if any further changes will be made to the current NI threshold, or if the recent 1.25% increase to the dividend tax rate will also be reversed.

“The new Prime Minister is said to be considering a possible increase in the personal allowance for income tax. The personal allowance was set at £12,570 for 2021/22, and frozen at that level by the Spring Budget 2021 for the four-year period from 2022/23 to 2025/26, with no inflationary increases.

“Truss has also stated that she will cancel the planned increase in corporation tax, which would have increased the rate paid by the most profitable companies from 19% to 25% from April 2023.”

Steele added: “Despite the focus on tax during the leadership campaign, all announcements are of course subject to change when formal plans are drawn up. As our new Prime Minister grapples with the economic situation, currently planned measures may be postponed or cancelled, and other measures introduced.”

Senior personal finance analyst at Hargreaves Lansdown, Sarah Coles, added: “The smoke and mirrors of campaigning have been packed away, so after a summer of hints and pledges, soon we’ll finally discover whether the new Prime Minister will deliver the radical solutions that this profound energy crisis requires.

“So far, during the endless rounds of hustings, articles and interviews, we’ve discovered a handful of personal finance changes that are on the cards, and a handful more which have technically been ruled out. Truss is putting an awful lot of faith in tax cuts to ease the pain of rising prices and then kick-start economic growth. Of course, we’ll have to see whether all that sticks when the rubber hits the road.

“But with price rises of this scale hitting across the board, and propelling us into the biggest two-year drop in real incomes in a century, the government can’t afford to fall short when considering possible solutions.”

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