There has been a lot of speculation about what will be announced in the Spring Budget on 6 March 2024. This is the final budget for Jeremy Hunt, Chancellor of the Exchequer, to set tax policies that will steer the Conservatives towards the general election.  The assumption is that the Chancellor will focus on areas that may help them with votes.

We have been scanning the papers and articles online and collated a few of these predictions we have been reading about for you.

1. Income tax cuts appear likely and could be delivered by increasing the personal allowance and/or basic rate tax band or by reducing the basic rate. Alternatively, the chancellor could follow his Autumn Statement approach and cut National Insurance contributions (NICs) rates further.

2. Inheritance tax - as always, there is speculation about whether there will be changes to the Inheritance tax (IHT). Could this be cut or even stopped altogether? IHT reforms would be popular with traditional Tory voters, and there are even suggestions the tax could be axed.

3. The amount investors can take from dividends or capital gains tax-free is set to halve from April to £500 and £3,000, respectively. But could there be a last-minute pre-election respite?

4. Many measures introduced by the Conservative government since COVID have been focused on getting people back to work. In 2023, the government consulted on providing a form of ‘super-deduction’ for firms that offer certain types of healthcare, particularly regular health screenings and medical check-ups. KPMG predicts that a super deduction for employers who provide particular healthcare and relief from any associated benefit-in-kind charge will be announced.

5. The chancellor is reportedly considering raising the £50,000 threshold at which claimants begin to lose their child benefit. This would help households that have seen their incomes rise above this threshold due to inflation.

6. Lifetime ISAs were introduced to help people buy their first home, with savers receiving a 25% per cent boost from the government. The expectation is that there may be some relaxation to LISA rules, perhaps indexing up the price of houses that can be acquired beyond £450,000 or reducing the penalty if money is withdrawn.  And expect this to be coupled with an extension to some of the current SDLT reliefs.

It will be interesting to see which of these does happen next week. We will send out a summary as expected after the budget has been announced.

Sources used

Kirby, J. (2024) What to expect from the Spring Budget 2024

RSM (2024) Predictions: Spring Budget 2024

Shoffman, M. (2024) Spring Budget 2024 - what it could mean for your finances

Sarson, T. and Baynham, S. (2024) Spring Budget 2024: Paving the way for the general election

Jenkin, M. (2024) Spring Budget 2024: what changes could Jeremy Hunt announce?