The Chancellor is said to be considering a number of tax hikes and reforms in order to recoup funds, and will outline his policy changes in his Budget on March 3. Julia Rosenbloom, a partner and Smith and Williamson and tax adviser, warned that potentially exempt transfers (PET) could be abolished, and recommended that people make gifts sooner rather than later to avoid extra charges. The rules allow individuals to make gifts of unlimited value to friends and family members without being hit with any inheritance tax liabilities if you live for a further seven years. Ms Rosenbloom wrote for Your Money: "This could be replaced with an immediate lifetime inheritance tax charge upon making the gift.

"If the recommendations made by the APPG (the All-Party Parliamentary Group for Inheritance and Intergenerational Fairness) in their report released in January are taken on board, that could mean a rate of 10-20 percent where a gift exceeds £30,000.

"So, if you’re thinking of making a substantial gift, it would be advisable to consider doing it sooner rather than later. Action taken in anticipation of changes does, however, involve significant risk as changes may not be introduced as expected."

However, other experts are warning that there is a little-known area of flexibility which could enable people to save 90 percent on taxes.

Moving money into a family member’s pension is one of the most efficient ways of reducing your estate for inheritance tax purposes and comes with the added boost of income tax relief, as highlighted by the Telegraph earlier this month.

Pension contributions made via a gift from another family member attract tax relief at the recipient's marginal rate of income tax.

If they are not a taxpayer, contributions will still benefit from relief at the basic, 20pc, rate.

READ MORE: Rishi Sunak risked fury as 'clock ticking' on pension tax rise

Andrew Tully of Canada Life, a pension provider, said: “Making lifetime gifts to family members by way of pension contributions is a little-known area of flexibility within the pension system, but from a tax perspective, is hugely efficient.”

Richard Murphy of Tax Research UK warned against tax increases in an interview with Express.co.uk last year.

He said: "At first, Rishi Sunak completely underestimated what was going to happen, it was a complete disaster, because he hadn't realised how disastrous coronavirus was going to be.

"But he was back a week later with the furlough scheme, it was smart, quick, some people lost out when they shouldn't have done.

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"Now Sunak's obsession with debt is kicking in again.

"If he opts for austerity and tax hikes, then frankly we are heading for depression rather than a recession."

The UK has avoided a double dip recession, but the country is facing difficult times ahead after 2020's slump.

The country has endured its biggest annual decline in 300 years, with The Office for National Statistics (ONS) outlining a GDP slump of 9.9 percent in 2020, the biggest fall since 1709 when Britain was hit by the Great Frost and the economy contracted by 13 percent.