6thMar
News article

2024 Spring Budget - the business reaction

Business groups have reacted to Chancellor Jeremy Hunt's Spring Budget speech.

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Business groups have reacted to Chancellor Jeremy Hunt's Spring Budget speech.

The Confederation of British Industry (CBI) said the Chancellor 'had to perform a tricky high wire balancing act of giving momentum to the economy without sacrificing hard-earned progress on bringing down inflation'.

Rain Newton-Smith, Chief Executive of the CBI, commented: 'The reduction in high marginal tax rates for working parents, alongside cutting national insurance contributions (NICs), offers a broad set of measures that will incentivise work at a time when access to labour represents a major obstacle to business growth.'

Meanwhile, the British Chambers of Commerce (BCC) said that whilst the Budget 'boosts jobs', an 'economic challenge remains'. Shevaun Haviland, Director General of the BCC, stated: 'Following the Autumn Statement this Budget was always set to deliver less for business, although changes to national insurance will provide some momentum.

'However, beyond this there were no major announcements to help shift the dial on conditions for business. Business confidence is improving but the coming months will remain challenging for many companies. It is vital that the economy remains front and centre of the campaign to come.'

The Federation of Small Businesses (FSB) stated that it was 'pleased to see a package of small business support in the Budget'. Tina McKenzie, Policy Chair at the FSB, said: 'We welcome [the] increase in the VAT threshold as well as the cut to self-employed NICs.

'Elsewhere, we were pleased to see a package of small business support in the Budget documents, including commitments to make progress on the HMRC administrative burden and on the national roll-out of the Business Energy Advice Service, as well as extending the Recovery Loan Scheme under a new name – the Growth Guarantee Scheme. Small firms are crucial for economic growth, and we were glad the Chancellor has said that clearly from the despatch box.'

The Institute of Directors (IoD) branded the Spring Budget 'unremarkable' for businesses. Roger Barker, Director of Policy at the IoD, said: 'First and foremost, business was hoping for a Budget that would maintain a stable and credible policy framework for business. The Chancellor largely delivered that. However, beyond that, there was little in the announcements that can be regarded as a game-changer for business.'

6thMar
News article

2024 Spring Budget - the political reaction

Addressing the House of Commons, Chancellor Jeremy Hunt used the 2024 Spring Budget to announce a 'Budget for long-term growth', announcing an employee national insurance tax cut from 10% to 8% in April; an increase to the High Income Child Benefit Charge from £50,000 to £60,000; and the abolition of the non-dom tax regime, which will be replaced with a fairer system from April 2025.

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Addressing the House of Commons, Chancellor Jeremy Hunt used the 2024 Spring Budget to announce a 'Budget for long-term growth', announcing an employee national insurance tax cut from 10% to 8% in April; an increase to the High Income Child Benefit Charge from £50,000 to £60,000; and the abolition of the non-dom tax regime, which will be replaced with a fairer system from April 2025.

Responding to the Chancellor's speech, Labour Party Leader Keir Starmer said that the UK's 'national credit card is maxed out'. Commenting on the government's Budget measures, he continued: 'They lost control of the economy, they sent interest rates through the roof.

'They made working people pay. They should be under no illusion – that record is how the British people will judge [the Budget] cuts. They know the thresholds are still frozen, dragging more and more people into higher taxes.'

Meanwhile, Carla Denyer, Co-Leader of the Green Party, said: 'We needed a Budget that released the money available from a Wealth Tax to invest in the green jobs of the future, to cut NHS queues and restore nature and the places we live and work.

'We needed a Budget that introduced a Wealth Tax, and reformed capital gains tax and national insurance to raise over £50 billion per year. That would have provided the vital public investment our country is crying out for.' 

6thMar
News article

2024 Spring Budget - the economic picture

Within his Spring Budget speech, Chancellor Jeremy Hunt announced that the UK economy is set to grow 'slightly faster than expected'.

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Within his Spring Budget speech, Chancellor Jeremy Hunt announced that the UK economy is set to grow 'slightly faster than expected'.

According to the Office for Budget Responsibility (OBR), the government's official forecaster, the economy will grow by 0.8% this year and by 1.9% in 2025.

The Chancellor stated that the economy is 'turning a corner', with inflation expected to fall to target next quarter, wages consistently rising faster than prices and better growth than other European countries.

Higher growth gave the Chancellor extra leeway in the Budget, which he used to announce a continuation of the freeze on alcohol and fuel duties; an employee national insurance tax cut from 10% to 8% in April for 27 million working people; and an increase to the High Income Child Benefit Charge from £50,000 to £60,000.

In its latest forecast, which was prepared for the Budget, the OBR said that borrowing will rise in the next financial year, and then remain broadly in line with its previous forecasts.

However, the OBR also warned that the UK's debt will rise over the coming four years before falling in the fifth year. Debt as a proportion of GDP will still be 92.9% in 2028/29, the OBR also forecasted.

The government stated that the measures announced in the 2024 Spring Budget 'will reduce inflation in 2024/25 and bring the equivalent of over 100,000 people into the workforce by 2028/29'. 

6thMar
News article

2024 Spring Budget - what to expect

Chancellor Jeremy Hunt will present the 2024 Spring Budget today. We will keep you up to date on the key Spring Budget announcements and supply a summary, which will appear on our website.

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Chancellor Jeremy Hunt will present the 2024 Spring Budget today. We will keep you up to date on the key Spring Budget announcements and supply a summary, which will appear on our website.

According to reports, the Chancellor is considering two main cuts: a reduction in national insurance (NI) and an extension to the cut in fuel duty. He is also expected to announce a 'vaping products levy', which would be charged on manufacturers and importers of the liquid in vapes.

The Chancellor said: 'We do want to move to a lower taxed economy, but we're only going to do so in a way that is responsible and recognises that there are things that taxes pay for, that we couldn't cut taxes by borrowing.

'We'll do so in a responsible way. But if we can spend money on public services more efficiently, then that will mean less pressure on taxpayers.'

Prime Minister Rishi Sunak claimed that the UK economy is 'on the right track', despite data recently showing that the UK fell into recession at the end of last year. He commented: 'I'm determined, as Prime Minister, to make sure that the UK is the best place in the world to invest and grow a business.'

However, borrowing costs have risen sharply and Mr Hunt recently admitted that forecasts on what 'headroom' the government has have 'gone against' him.

5thMar
News article

Reports suggest air travel tax could rise in Spring Budget

Chancellor Jeremy Hunt could raise revenue on Air Passenger Duty (APD) in the Spring Budget, reports suggest.

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Chancellor Jeremy Hunt could raise revenue on Air Passenger Duty (APD) in the Spring Budget, reports suggest.

Reports have hinted that the Chancellor is considering a range of options that would permit him to make billions of pounds of personal tax cuts. One of these options is to increase APD for business travel, which would mean a rise in business class air fares.

Mr Hunt is also said to be considering a tax on vapes and abolishing the non-dom tax status.

Commenting on the upcoming Budget, Mr Hunt stated: 'It is going to be a prudent and responsible Budget for long-term growth.

'When it comes to tax cuts, I do believe that if you look around the world, countries with lower tax tend to grow faster - North America, Asia - and so I do think in the long run we need to move back to being a lower taxed, more lightly regulated economy.

'It would be deeply unconservative to cut taxes in a way that increased borrowing, wasn't fully funded.'

4thMar
News article

Chancellor 'considering scrapping non-dom tax rules' in Spring Budget

Chancellor Jeremy Hunt is reportedly considering scrapping the non-dom tax status in the upcoming Spring Budget.

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Chancellor Jeremy Hunt is reportedly considering scrapping the non-dom tax status in the upcoming Spring Budget.

According to reports, the Chancellor is exploring a range of options designed to reduce spending or increase the amounts held in government coffers to then be able to afford personal tax cuts.

Research carried out by Warwick University and the London School of Economics (LSE) found that scrapping the non-dom tax status could generate £3.6 billion. According to HMRC statistics, as of 2022 there were 68,800 non-dom taxpayers in the UK.

Reports suggest the Chancellor has not yet committed to removing the non-dom tax status, and is awaiting additional information from the Office for Budget Responsibility (OBR) in regard to the issue.

Shadow Chancellor Rachel Reeves previously stated that abolishing the non-dom tax break in full would raise at least £3 billion per year. 

1stMar
News article

HMRC's tough approach to IR35 has 'chilling effect' on economic activity, warms IPSE

HMRC's tough approach to enforcing the IR35 rules is having a 'chilling effect' on legitimate economic activity, warns the Association of Independent Professionals and the Self-Employed (IPSE).

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HMRC's tough approach to enforcing the IR35 rules is having a 'chilling effect' on legitimate economic activity, warns the Association of Independent Professionals and the Self-Employed (IPSE).

IPSE's warning comes after the tax authority was criticised by in a report by Parliament's Public Accounts Committee (PAC).

The report warns that HMRC's customer service levels have reached an 'all-time low'.

It also scrutinised issues around the IR35 rules on off-payroll working.

The PAC says it is concerned that HMRC's 'tough approach to tackling IR35 is deterring legitimate economic activity' and 'unnecessarily putting companies off using contractors'.

IPSE's Director of Policy, Andy Chamberlain, said: 'The PAC is absolutely right to highlight the chilling effect of IR35 on legitimate economic activity.

'HMRC has hounded individuals through the courts for years, often only to be proved wrong. This is making clients extremely reluctant to engage the freelance talent they need to deliver projects.

'If we really want to see a return to growth and engender a culture of economic confidence, we must harness the benefits of our flexible labour market, rather than stifling it with the unworkable off-payroll rules.'

29thFeb
News article

Chancellor 'considering national insurance cut' in Spring Budget

Reports have suggested that Chancellor Jeremy Hunt is considering cutting national insurance in the Spring Budget on Wednesday 6 March.

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Reports have suggested that Chancellor Jeremy Hunt is considering cutting national insurance in the Spring Budget on Wednesday 6 March.

According to economists, the Chancellor is seeking to make 'smart tax cuts' aimed at boosting the UK economy.

According to the BBC, Mr Hunt is considering slashing national insurance in the Budget on Wednesday, rather than income tax.

During the 2023 Autumn Statement, the Chancellor announced a significant cut in national insurance which saw the main rate reduced from 12% to 10%. The BBC stated that an additional cut to national insurance of just 1% would cost £4.5 billion per year.

However, the Institute for Fiscal Studies (IFS) has warned that tax cuts should be implemented at a later date. Carl Emmerson, Deputy Director at the IFS, said: 'We don't think we should be implementing certain tax cuts now, essentially that are paid for by uncertain spending cuts that might never be delivered.

'There's lots of problems in our tax system - we need genuine tax reform - and if we want growth-friendly tax cuts we should be looking at stamp duty on purchases of properties and stamp duty on purchases of shares.' 

28thFeb
News article

March is top month for Marriage Allowance claims

HMRC has revealed that March is the most popular month for Marriage Allowance applications, with almost 70,000 couples applying in the third month of 2023.

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HMRC has revealed that March is the most popular month for Marriage Allowance applications, with almost 70,000 couples applying in the third month of 2023.

As well as reducing a couple's tax bill for the 2023/24 tax year by up to £252, there is the option to backdate the claim for the previous four tax years. This means eligible couples could receive a lump-sum payment worth more than £1,000.

The Marriage Allowance saves couples money by allowing the lower or non-earner to reduce the amount of tax their partner pays by transferring up to £1,260 of their Personal Allowance to their husband, wife or civil partner.

To benefit from the tax relief, one partner must have income less than the Personal Allowance of £12,570, and the higher earning partner's income must be between £12,571 and £50,270 (£43,662 in Scotland).

People can find out in 30 seconds if they are eligible by using the online Marriage Allowance calculator.

Angela MacDonald, HMRC's Deputy Chief Executive and Second Permanent Secretary, said: 'The Marriage Allowance keeps money in your pocket by reducing the amount of tax you and your spouse pay by up to £252 a year.'

27thFeb
News article

Minister warns 'Tourist Tax' unlikely to be reversed in Spring Budget

The so-called 'Tourist Tax' is unlikely to be reversed in the Spring Budget, Nigel Huddleston, Financial Secretary to the Treasury, has warned.

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The so-called 'Tourist Tax' is unlikely to be reversed in the Spring Budget, Nigel Huddleston, Financial Secretary to the Treasury, has warned.

Eradicating the tax would allow international visitors to shop in the UK tax-free. However, Mr Huddleston emphasised the complexity associated with removing the tax, and highlighted challenging legislative hurdles involved with abolishing the tourist tax and introducing an alternative.

Huddleston, sad it was 'not possible to introduce the same system as before, given that it would now need to be open to visitors from the EU as well as the rest of the world'. 

He added: 'Any new scheme, no matter the design, would take time to legislate for and implement in order to prevent non-compliance risks and ensure operation.'

Business groups, such as the British Chambers of Commerce (BCC), have urged Chancellor Jeremy Hunt to use the Budget to ditch the Tourist Tax.

Shevaun Haviland, Director General of the BCC, recently said: 'It was great to be at Heathrow . . . to hear how a new internationally competitive tax-free shopping scheme would turbocharge Britain's economy, helping retailers and hospitality venues across the country.'

The BCC estimates that the tax costs the British retail sector £1.5 billion per year and adversely affects the UK tourism and hospitality sector.