In preparation for his Autumn Statement, Chancellor Jeremy Hunt is poised to address backbench Tory demands for tax cuts, particularly focusing on slashing the inheritance tax rate.
The Chancellor is expected to announce a halving of the inheritance tax rate and potential tax reductions for small businesses.
However, certain measures, such as a cut to stamp duty, might be deferred to the Spring Budget due to concerns about inflation.
Proposed Tax Cuts and Concerns:
1. Inheritance Tax Reduction:
Jeremy Hunt is reportedly considering a significant reduction in the inheritance tax rate, possibly from the current 40% to 30% or even 20%.
The threshold for inheritance tax, currently applicable to estates worth over £325,000, might also be subject to an increase.
The Chancellor is evaluating options to alleviate the tax burden on inheritances.
2. Boost for Small Businesses:
As part of the Autumn Statement, small businesses could witness a boost if the Chancellor raises the VAT threshold from £85,000 to £90,000.
This move aims to support businesses by reducing their tax liabilities and fostering investment.
Jeremy Hunt is under pressure to make the three-year policy of ‘full expensing’ announced in the March Budget a permanent change.
3. Council Tax Concerns:
Amidst potential tax cuts, there are concerns about an increase in council tax, with local authorities being allowed to raise it by up to 5% from April.
This could result in an estimated £120 per year increase for the average family home.
Critics argue that such rises may exacerbate the tax burden on struggling households.
Comments and Political Landscape:
The looming Autumn Statement has gained heightened importance for both Chancellor Jeremy Hunt and Prime Minister Rishi Sunak, especially following the Supreme Court’s blockage of the Rwanda migration deal.
Pressure from the Tory Right to deliver tax cuts to improve the party’s poll ratings before the general election adds a political dimension to the anticipated fiscal measures.
Jeremy Hunt’s fiscal headroom of over £20 billion provides him with the flexibility to potentially implement tax reductions.
Prime Minister’s Perspective:
Prime Minister Rishi Sunak refrains from providing hints on whether Chancellor Jeremy Hunt will deliver tax cuts in the Autumn Statement.
The focus shifts to economic milestones and pledges fulfilled, such as halving inflation, which is viewed as a crucial step in easing the cost of living for families.
Future support measures are hinted at, with winter pensioner assistance and extra support for energy bills mentioned.
Conclusion:
As the Conservative Government strives to ease the cost of living, the Autumn Statement is anticipated to unveil specific measures, including potential tax cuts, as part of Chancellor Jeremy Hunt’s economic strategy.
Share on Facebook «||» Share on Twitter «||» Share on Reddit «||» Share on LinkedIn