What are we expecting in the spring budget?
Mr Hunt will deliver his Spring Budget in Parliament on Wednesday 15 March. The Chancellor normally delivers his statement after Prime Minister's Questions, which typically finish at 12.30pm. His statement is likely to focus on the Government’s aims to halve inflation, reduce public debt and boost economic growth.
Getting early retirees & long-term sick back to work
Mr Hunt’s primary focus with the Spring Budget will be to get Britain back to work. Excluding students, there are 6.6 million working aged adults who are classed as economically inactive. The number of people neither working nor looking for a job has jumped by more than half a million people in the last three years.
Another 2.5 million economically inactive people are classed as long-term sick and Mr Hunt also wants to get many of this group back into work. One policy on the cards is a sick note crackdown. The Treasury has been working with the Department for Work and Pensions to change how GPs issue sick notes, with a focus on continuing work with support instead of getting signed out of the labour force altogether.
Another policy option is to reboot the benefits system, so that sick people who return to work part-time can continue claiming some sickness benefits.
Support for energy bills
The Government’s Energy Price Guarantee, which caps energy costs for households, is scheduled to rise from £2,500 to £3,000 on April 1. Support for businesses will also become more targeted. We shall see if this will be confirmed.
Fuel duty cuts
Fuel duty is supposed to rise by RPI inflation in April, which would add 7p to the price of a litre of fuel. A temporary 5p fuel duty cut, announced by Mr Sunak in March 2022, is also due to expire this March.
Corporation tax rise
Despite warnings from business leaders that higher taxes will hamper growth, Mr Hunt will almost certainly carry on with the planned rise in corporation tax rise scheduled to take effect from April.
The change will see businesses face a six percentage point increase in the corporation tax rate, which will climb from 19pc to 25pc. This is expected to net £18bn a year for the Treasury.
Investment incentives are scheduled to be removed. The corporation tax super-deduction, which allows businesses to cut their tax bill by 25p for every £1 that they invest, will end on March 31.
We will be releasing our budget round up pack soon after the budget has been announced by the Chancellor. If you have any questions do get in touch with your Swindells partner who will be able to advise you further.
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