Chancellor Jeremy Hunt has said that there is little scope for further tax cuts in the Spring Budget.
In last year’s Autumn Statement, the Chancellor announced various tax breaks, including a cut to the main rate of National Insurance from 12% to 10%. In January, he suggested that he intended to reduce taxes in the upcoming Spring Budget.
Furthermore, while addressing the annual World Economic Forum in Davos, Switzerland, he highlighted that nations with lower tax rates experience more “dynamic, faster-growing economies”.
However, reports from The Times state that during a recent cabinet meeting, Hunt acknowledged “major structural weaknesses” in the economy, citing low productivity as the primary cause. This casts more doubt on the possibility of significant tax cuts in the upcoming Spring Budget on 6 March.
Speaking on the BBC’s Political Thinking podcast, the Chancellor said:
“It doesn’t look to me like we will have the same scope for cutting taxes in the Spring Budget that we had in the Autumn Statement. But we also want to be clear that the direction of travel we want to go in is to lighten the tax burden.”
In response to the reports, Mr Hunt mentioned that he is awaiting the “final numbers” from the independent Office for Budget Responsibility (OBR) which guides the Government’s budgeting decisions.
Despite the tax burden reaching a record high, further tax cuts may be improbable. The Institute for Fiscal Studies (IFS) recently highlighted the need for the next Government to secure an additional £20 billion to sustain current spending levels.
Contact us about your tax liabilities.