Ahead of next Wednesday’s Budget, this post summarizes speculation about possible announcements and what various industry groups are demanding from Chancellor of the Exchequer Jeremy Hunt.
tax reduction
Mr. Hunt under pressure to reduce taxes From a Conservative Party member previously suggested He continues to hide this move as a pre-election bonus.
However, the prime minister I recently asked a question The question is whether he has the ability to do this by March, given government debt and the UK’s high repayment costs. Entering recession.
Economists at Pantheon Macroeconomics predict he will have £25bn of cash available.
Former chancellor George Osborne said on his Political Currency podcast that Rishi Sunak and Jeremy Hunt were in a debate over whether to cut income tax.
Number 10 wants cuts, but the Office for Budget Responsibility believes such a move would be inflationary, he added.
National insurance premium reduction
Mr Hunt could decide to cut National Insurance by 1p again, at a cheaper cost of around £5bn.
The Times reports that the Chancellor is considering a 2p income tax cut after it was shelved as being unaffordable.
Steal labor policy on “Nom Dam”
According to Sky News, the Chancellor is considering scrapping the tax breaks that Brits living abroad can enjoy for tax purposes.
The change to non-resident tax status, which would mean “non-residents” would not have to pay tax on money earned outside the UK, was a Labor promise previously criticized by Jeremy Hunt.
According to the latest figures from HMRC, calculated for the tax year ending in 2022, there are around 68,800 non-domes in the UK.
Akshata Murthy, the prime minister’s wife, previously benefited from the position until two years ago when she pledged to pay UK tax on her overseas income.
vape duty
According to the same report, Mr Hunt is considering introducing a “vaping product tax” to pay importers and manufacturers of e-cigarettes to put the habit out of reach for children. .
Downing Street confirmed to Sky News that the levy was being considered “as an option”.
Help for first-time buyers
Apart from the tax cuts, Mr Hunt is said to be drafting proposals for a 99% mortgage scheme ahead of the Budget.
According to the Financial Times, the government acted as a loan sponsor, allowing first-time buyers to put down a 1% deposit.
However, according to the Telegraph, it has now been scrapped.
There was reportedly pushback from lenders who warned that defaults by borrowers could rise sharply.
Estate agency Rightmove has called on the government to implement three policy changes in the budget to help people move, and to keep the ones scheduled to be abolished.
Tim Bannister, property expert at Rightmove, said: “At the very least, the Government will make the current changes to first-time buyers’ stamp duty liability permanent, as the higher threshold introduced in 2022 expires next year. should be considered.”
It also proposes a more regional approach to stamp duty, the creation of a mortgage scheme to support first-time buyers and more incentives for landlords to build greener homes for their tenants.
Auto insurance, EV, fuel tax
The UK car industry is pleading with the Prime Minister to reinvigorate the transition to electric vehicles (EVs).
The Automobile Manufacturers’ Trade Association is calling for value-added tax on new EVs to be reduced from 20% to 10%.
Meanwhile, the AA submitted the following list of demands to the Prime Minister:
- Maintain fuel tax freeze. It has been frozen since 2011, but is due to rise by 5p at the end of March.
- For green vehicles, reduce the VAT on on-road EV charging from 20% to 5%.
- If automobile excise tax is introduced for EVs after 2025, the automobile excise tax will be lower than that for gasoline and diesel vehicles.
- Reduce insurance premium tax (IPT) by 25%. According to the Association of British Insurers, this tax on insurers is passed on to motorists and adds £67 to the average premium.
hospitality
As businesses continue to struggle, hospitality industry bodies are calling for action. They want the value-added tax on food and drink to be reduced from the current 20%, similar to during the pandemic.
inheritance tax will be abolished
There was a lot of speculation Mr Hunt could abolish inheritance tax But abolishing it would be a huge electoral gamble, given that around £7bn a year is raised for public services and only 4% of the population pays for it.
Full review of ISA rules during its lifetime
Mr Hunt has hinted he is open to changing the rules for Lifetime Individual Savings Accounts (LISA) as another way to get more people onto the property investment ladder.
LISA offers a government-provided bonus for saving to buy your first home, but if the cash you save is not used for a property or if the property you buy exceeds the current limit of £450,000. If so, penalties will apply.
Savings expert Martin Lewis called for the cap to be raised to take account of rising house prices and for penalties to be lowered to make the scheme a more attractive means of saving.
child allowance reform
Mr Hunt may also use the budget to raise the threshold for the controversial high-income child allowance.
Currently, those who claim child benefit must pay back part of it if they earn more than £50,000 a year, and the full amount once they start earning £60,000 a year. The law is thought to be particularly punitive for single-income households, as one parent earning £50,000 will be prosecuted, but two parents, each earning £49,000, will be spared. ing.
According to the Resolution Foundation, raising the withdrawal threshold from £50,000 to £70,000 would cost £2bn, while scrapping it completely would cost £4bn.