The Tory party in the UK is shifting gears and preparing for the upcoming election with a spring budget that includes a reduction in work-related taxes and hints at future reductions. The budget, presented in the House of Commons this afternoon by Chancellor Jeremy Hunt, included few unexpected elements but was declined by the Labour Party, who criticised the disguised tax increases like the rise in council taxes that could nullify worker benefits.
Jeremy Hunt revealed a key proposal to decrease national insurance by 2p, reducing the primary rate from 10% to 8%. With this, Hunt claimed the average British worker could save up to £450. This follows a parallel cut administered half a year ago as stated in the UK government’s autumn fiscal report.
Contrary to his party’s right wing’s hopes, the Chancellor did not declare any collections in income tax rates. However, Hunt hinted that the UK is headed towards a future with lower taxes, with the possibility of additional cuts being hinted at.
The Chancellor also outlined various measures including a 12-month stay in the duties on alcohol and fuel, a tax on e-cigarettes, and a surge in the tax paid by business-class air travellers. Hunt further extended the windfall tax on North Sea oil firm profits to 2029, which he stated could generate £1.5 billion.
He also ended the contentious ‘non-dom’ system of tax benefits for individuals domiciled elsewhere but residing in the UK. The system, previously utilised by Prime Minister Rishi Sunak’s wife, Akshata Murty, will be superseded by a new residency-based system. Eventually, all prior non-dom beneficiaries will be taxed the same as British citizens within four years.
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