The Spring Budget 2024 is fast approaching, and with a general election on the horizon for the end of the year, winning the support of voters will be prominent in Chancellor Jeremy Hunts mind.
With the news that the UK economy has officially entered recession how will Hunt try and promote growth whilst keeping an eye on the polls to ensure popularity from the voters. Here are our predictions for the Spring Budget:
Jane Bull, Director of Accounting
“With a general election on the cards later in the year, the chancellor is expected to emphasise key conservative values and aim to support aspiration in the Spring 2024 budget. My colleagues in the tax department are expecting this with potential inheritance tax reforms and our client services department are predicting a fall in the personal tax rates.
From a company perspective, I think we are more likely to see restrictions lifted on Employee Share Incentive Schemes to make them more attractive to employees and encourage employee investment. In addition, the Chancellor is expected to try to assist first time buyers onto the property ladder with a potential return to the help to buy scheme – or a similar scheme including potentially government backed 99% mortgages. This coupled with the expectations that interest rates may fall with the bank of interest base rate predicted to fall to 3.75% by the end of 2024 scheme may also help the currently stagnant housing market.”
Helen Smith, Personal Tax Manager
“Currently employees pay Class 1 national insurance contributions of 12% on earnings above the £242 per week primary threshold, with earnings over £967 per week contributing 2%. Having taken an unprecedented step in the Autumn Statement to adjust national insurance contributions with almost immediate effect, my prediction is a further adjustment to NICs. Following the news of recession, and at a time when tax cuts will draw the eye of voters, Hunt will be looking to keep voters on-side. However, the funding of these tax cuts will make officials nervous, so I don’t predict a big headline grabbing tax cut for this budget. My prediction is that they will increase the additional rate at which higher earners are charged from the current 2%, but by how much we will have to see.”
Andrew Kilby, Director of Client Services
“As Jane and Helen have noted, within the payroll team we are anticipating further tax cuts especially with the general election on the horizon. Following the change in national insurance contributions in the Autumn Statement I am anticipating a big headline tax cut to draw the attention of voters in what is likely to be the last budget before the next election. By focusing on lower and middle-income earners Hunt will be hoping to win over voters and I think a reduction in the basic rate of tax to 18% is how he’s planning on doing this.”
We’ll have to see whether these predictions match Jeremy Hunt’s thinking on 6th March.