Proactive Investors - What to expect from the Spring Budget:
Chancellor Jeremy Hunt will unveil the Spring Budget today at 12:30, in what will be a key moment for Rishi Sunak’s government ahead of the impending general election.
Sweeping handouts are therefore expected as Hunt looks to tempt voters, including through the likes of national insurance, fuel duty and potentially even income tax cuts.
A 2p cut to national insurance from April has effectively been confirmed, according to reports, following a reduction in last year’s Autumn Statement, which took effect in January.
A 5p cut to fuel duty, which has been frozen since mid-2022 until this month, is also expected to be extended for a year.
Then comes income tax. Hunt had reportedly ruled out a change on Thursday over fears of fuelling inflation, but could now introduce a 1p cut, as per a Politico-cited cabinet member.
Given such cuts are expected to cost the Treasury a combined £22 billion annually, reductions in public spending are said to be more than likely to take place.
These are set to coincide with new and increased taxes in other areas, given Hunt’s fiscal headroom is said to sit around £20 billion, as noted by XTB analyst Kathleen Brooks.
This will likely see the introduction of a vape duty, increased tobacco duty, reductions in tax breaks for second home owners who let out the property for holidays, an extension of the energy windfall tax, and tweaks to tax rules on those with non-domiciled status.
A Great British individual savings account (ISA) could well also be in the works, in a bid to encourage investment in the UK.