News
Budget 2024 Predictions
22 Jan 2024
As we eagerly anticipate the unveiling of the Spring Budget 2024, whispers of potential fiscal shifts and policy adjustments have ignited a sense of curiosity. What can we expect from the upcoming financial roadmap, and how might it impact our tax and economic landscape?
James Clark, Tax Partner
In this article, James Clark, Tax Partner, delves into the speculations surrounding the Budget, exploring key areas that could see transformation and addressing the pressing question of when these changes might occur.
Inheritance Tax: A Potential Farewell:
The looming possibility of bidding farewell to Inheritance Tax (IHT) has captured attention. A tax that currently affects a mere 4% of estates, the rumour mill suggests its abolition might be more than just a policy move — it could be a strategic election pleaser. While the Conservative party downplays the notion, simplifying our tax structure resonates with many.
Income Tax Liberation:
Could income tax thresholds experience a liberating boost for the first time since 2022? With frozen bands potentially thawing out due to inflationary adjustments, taxpayers might find relief from the clutches of ‘fiscal drag.’ The tantalising prospect of a pre-election gift in increased allowances lingers.
Easing the Tax Burden:
Following the reduction in National Insurance Contributions, there’s a buzz surrounding the prospect of income tax rates taking a downward turn. The Conservative party’s commitment to easing the tax burden aligns with public sentiment, with a 1-2% reduction in the introductory rate of income tax appearing on the horizon—a move aimed at fostering economic resilience and individual financial well-being.
Digital Transformation of Tax:
The digitalisation of tax reporting continues its march forward under the banner of Making Tax Digital. However, questions linger about the adequacy of the Government’s efforts as the April 2026 deadline approaches. Will we witness a comprehensive overhaul or just incremental adjustments?
Stimulating Growth through VAT:
Economic growth could receive a shot in the arm with talks of raising the VAT registration threshold. A barrier to growth for some businesses, this threshold, which has been static since 2017, might transform, fostering a more vibrant business landscape.
ISA Limits: Fueling Savings:
Savers might be in for a treat as rumours resurface about potential increases to Individual Savings Account (ISA) limits. A nod to encouraging and rewarding savers, this move, if materialised, could reshape the savings landscape.
As we anticipate the unveiling of the Spring Budget on March 6 2024, the air is pregnant with expectations and speculations. The Government’s ability to deliver a package of measures, from tax cuts to economic stimuli, remains a crucial question. The possibility of a ‘5-year tax-cutting plan’ adds an intriguing layer, suggesting a phased approach over several years. All eyes are on the political horizon, with the shadow of change and reform looming large. Come March, the fiscal fate of the nation will be revealed, and the impact of these potential shifts will unfold in the days and years to come.
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