The latest UK Budget, unveiled by Chancellor Jeremy Hunt, includes significant tax cuts, reforms targeting economic growth, and measures to ensure fiscal responsibility, amidst a projection of the highest tax burden since 1948.
Chancellor Jeremy Hunt recently unveiled the UK’s Budget, spotlighting a series of financial measures designed to benefit families and individuals while ensuring the nation’s economic growth and fiscal responsibility. Among the highlights were tax cuts, including a significant 2p reduction in national insurance contributions, expected to aid approximately 27 million employees. High earners could see savings up to £1,508, although some experts caution that the freeze on personal tax thresholds might dilute these benefits for some taxpayers.
The Budget also proposes reforms to the non-dom tax regime and the introduction of financial products such as the “British Isa,” aimed at encouraging investment in UK-listed companies. Despite these tax reliefs, the overall tax burden in the UK is projected to reach its highest level since 1948.
Other measures outlined involve the prohibition of underperforming workplace pension schemes from acquiring new business starting in 2027, the abolition of certain property tax reliefs, and enhancements to the transparency and competition within the pension sector. Childcare benefits have also been adjusted, with the threshold for the high income child benefit charge increasing from £50,000 to £60,000, exempting around 170,000 families from this tax charge. This adjustment will eventually benefit an estimated 485,000 families with an average of £1,260 in the fiscal year 2024/25. The strategy seeks to correct perceived inequalities in the system, particularly benefiting single-parent households.
Furthermore, savers are to enjoy a higher tax-free allowance for investments and the launch of a new savings bond, whilst the Budget delays the increase of alcohol duty and introduces a new tax on vapes. It also reverses several rules affecting angel investment criteria, all in a bid to stimulate economic activity and investment within the UK.
The government’s financial manoeuvres reveal an attempt to strike a balance between providing immediate financial relief to individuals and families, and laying down initiatives for long-term economic stability and growth.
