Chancellor Jeremy Hunt delivered a highly anticipated Spring Budget today, faced with pressure to cut taxes and bolster faltering public services.
The Chancellor confirmed expectations of a 2p employee national insurance cut and an extension of the fuel duty freeze, while he also announced plans to take on the ‘unfairness’ of the so-called child benefit tax trap.
Hunt boasted of a ‘budget for growth’, revealing a new ‘public service productivity plan’, additional leveling up funding for various areas of the country and a shake-up of the Isa regime to encourage investment in UK assets.
He also introduced duty on vaping products from 2026, and abolished the holiday letting tax regime and multiple dwellings relief.
How the Budget will affect you – essential reading
> How much the Budget’s 2p National Insurance cut will save you
> British Isa brings investors an extra £5k tax-free to boost UK stock market
> How much will the fuel duty freeze save you – and how much of petrol is tax?
> No help to boost stagnant EV sales in the Budget
> Budget raises threshold for high income child benefit charge to £60,000
> Annual stamp duty bill to rocket 74 per cent to £22.1bn by 2029
> NS&I to launch British Savings Bonds in April
> Council tax will soon rise by £13bn a year
> Mortgage rates will peak at 4.2% – far lower than previously forecast
> Chancellor hands landlords capital gains tax cut
> VAT threshold raised to £90,000 but small businesses call for more support
> Ten OBR forecasts to watch: From energy price jitters to inheritance tax gains
> NatWest retail sell-off will take place in the summer
> Budget failed to deliver ‘game-changers’ for the property market
> JEFF PRESTRIDGE: What pensioners should do to protect their wealth
> ALEX BRUMMER: Jeremy Hunt is running out of time
The squeeze on incomes continues from frozen tax thresholds, which have barely budged over the past five years. Meanwhile, over the period since 2019, inflation has been 22%
Personal tax
The Chancellor dismissed calls for inheritance tax changes and instead went with widely expected adjustments to National Insurance.
Employee NI was cut from 10 to 8 per cent, while the self employed NI rate was cut from 8 to 6 per cent.
The fuel duty freeze was extended for 12 months, while an alcohol duty freeze has been put in place through to February 2025. Duty on vaping products must be paid from 2026.
The Chancellor moved to ‘end the unfairness’ with regards to the child benefit tax trap, which will move to a household based system. The threshold will be moved from £50,000 to £60,000, with the top band upped to £80,000. Hunt said this will benefit 0.5m families, saving £1,300 on average from next year.
Tax calculator – will you be better off
House prices are set to tread water before rising sharply from 2025
Property tax
Both the holiday letting tax regime and multiple dwellings relief was abolished, but the higher rate on residential property capital gains tax was cut from 28 to 24 per cent.
The so-called ‘non dom’ tax system replaced with a ‘modern, fairer and simpler’ residency-based system. After tax-free four years, if you are still living in the UK, tax will be paid a the same rate as British citizens – raising £2.7bn by the end of forecast period
Isas, dividend tax and capital gains tax
As part of efforts to boost investment in the UK, the Chancellor confirmed the launch of the ‘British Isa’. Britons will be able to invest an additional £5,000 a year tax free in UK assets
There was also some detail on a shake-up for the pensions regulator and FCA, with a new requirement to disclose pension fund exposure to UK assets.
The Government will also launch a new British Saving bond, with a fixed rate for three years
The OBR marginally upgraded growth forecasts for next year
Going for growth
The Chancellor revealed plans to help boost the economy, most notably his ‘public service productivity plan’ that includes a £4.3billion NHS Workforce Plan
He also outlined spending devolution plans to allow more fiscal power for local leaders, and an additional £100million in leveling up funding for some areas.
Hunt highlighted fresh investment for creative industries, with £26million earmarked for National Theatre, as well as measures to support the childcare sector, upping rates paid to providers for children over 9 months old
He pledged up to £120million more for the Green Industries Growth Accelerator fund, and £270million more for advanced manufacturing industries
The Chancellor also confirmed that the Government’s remaining NatWest shares are to be sold this summer
The Bank of England is set to cut interest rates this year
OBR forecasts
Real household disposable income on track to rise by 0.8 per cent this year.
Borrowing falls from 4.2 per cent of GDP this year, to 3.1, 2.7, 2.3, 1.6 and 1.2 per cent in the following five years.
GDP to grow by 0.8 per cent this year and 0.9 per cent next year, 0.5 per cent higher than in the Autumn forecast
Business
There was good news for small business owners with the VAT registration threshold increased from £85,000 to £90,000 from 1 April. Hunt also revealed a £200million extension to the recovery loan scheme, helping 11,000 SMEs access finance
There was bad news for energy firms, thought, with the sunset on the energy profits levy extended to 2029.
This post first appeared on Dailymail.co.uk
