Everything to expect in Chancellor Jeremy Hunt’s Budget: From tax cuts to vape duty
5 March 2024, 19:52 | Updated: 6 March 2024, 00:15
With the Chancellor is set to announce the Budget on Wednesday, here’s everything to expect based on the predictions so far.
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Jeremy Hunt’s Budget preparations entered their final stages on Tuesday as he met with King Charles in a customary tradition to finalise the package.
Amid swirling speculation about what may or may not feature in the Budget, the Chancellor told LBC on Sunday that the it would be “prudent and responsible” to grow the economy in the long term and allow for tax cuts later.
While some of the expected spending and cuts of Mr Hunt’s Budget appear all but confirmed, others remain more up in the air - so here is all the predictions about Wednesday's announcement.
Read more: Jeremy Hunt 'to cut National Insurance by 2p' in Budget as tax boost for workers
National Insurance
One of the more likely results of the Chancellor’s Budget on Wednesday is a 2p cut to national insurance rates - after Mr Hunt already announced a cut to the rates last November.
Reports say the £10 billion move would save 27 million workers an extra £450 a year.
It is thought he will sell the move as a £900 overall tax cut to workers when combined with the two percentage point cut that was announced in November.
Income tax
The Chancellor has faced a barrage of calls from Tory MPs to cut income tax in the upcoming Spring Budget, however, government sources have suggested that national insurance is more likely to be slashed as it’s a cheaper way of cutting personal taxes.
However, experts have warned that public spending cuts to fund such a move could see public services suffer as a result.
Slashing income tax by just 1p would cost £7bn, according to the Resolution Foundation.
Fuel duty
Mr Hunt is expected to extend the fuel duty freeze for the 14th year in a row and a temporary 5p cut will be extended, Whitehall sources have suggested.
Fuel prices rose dramatically in the wake of Russia's invasion of Ukraine, and even rose by 4p a litre last month, though they remain significantly down from the peak sparked by the war.
The Chancellor is reportedly scrambling to make tax cuts an affordable part of the Budget, the last before the next general election.
Holiday lets crackdown
Tax perks for holiday let owners are rumoured to be scrapped in Wednesday’s Budget.
The move, which has been described as a ‘£300m raid on landlords’, is expected as part of the Chancellor’s plan to revive the rental markets in popular holiday destinations.
It means holiday home owners in areas such as the Lake District could lose an average of £2,835 a year to make up for a high number of holiday lets which have seen reduced council tax revenue and less permanent accommodation availability in the affected destinations.
Vape tax
New taxes on vaping appear likely in the Budget statement in a bid to help fund NI or income tax cuts.
Such a move is likely to be accompanied by an increase in taxes on tobacco to ensure smoking remains more expensive.
Scrapping non-dom status
The Chancellor is reportedly looking at scrapping ‘non-dom’ status to fund tax cuts on Wednesday.
Non-domicile status enables foreign nationals who live in the UK but are domiciled overseas to avoid paying UK tax on overseas income or capital gains for their first seven years in the country.
Experts have warned that such a move could lead to a decline of investment in the UK, as those affected may be more inclined to move to other locations.
Stamp duty and inheritance tax
Despite continued calls to cut stamp duty and inheritance tax, it appears unlikely that the Chancellor will announce any changes to these in Wednesday’s budget.
Sources at Westminster have said a cut to inheritance tax has been ruled out but changes to it in the future could be part of the Conservatives’ election campaign manifesto.
Mortgage 99% scheme
Mr Hunt was reportedly drawing up plans for a 99% mortgage scheme, which would allow first-time buyers to put down a 1% deposit, according to the Financial Times.
However, reports suggest this has since been scrapped following backlash from banks over the proposed move.
Lifetime ISA
The Chancellor has hinted he could change up rules around the Lifetime Individual Savings Account (LISA) in another bid to help more people on the property ladder.
When is the Spring Budget?
The Spring Budget will be held on Wednesday 6 March. Typically, the Chancellor begins the statement at about 12:30pm - following the end of Prime Minister’s Questions.
