Jeremy Hunt cuts National Insurance by 2p

Jeremy Hunt’s highly anticipated budget announcement has now clearly outlined the allocation of the country’s resources to the House of Commons. It serves as a reflection of the government's overarching vision and response to the prevailing economic challenges and opportunities. 

With expectations high and stakes significant, the unveiling of the budget represents a crucial juncture for policymakers, businesses, and the public alike, as they assess its implications for growth, prosperity, and societal well-being before the all-important general election.

Budget Headlines

Tax and Income Support

• National Insurance, a payroll tax, cut by 2p in the pound for employees and the self-employed
• Non-dom tax regime, for UK residents whose permanent home is overseas, to be replaced with new rules from April 2025
• £5,000 "British ISA" tax allowance for individual savers to invest in UK-listed companies
• Longer repayment period for people on benefits taking out emergency budgeting loans from the government
• £90 fee to obtain a debt relief order scrapped
• Government fund for people struggling with cost-of-living pressures to continue for another six months

Cigarettes, Vapes and Alcohol

• Freeze on alcohol duty, which had been due to end in August, to continue until February 2025
• New tax on vaping products to start in October 2026, following a consultation
• Existing tax on tobacco to increase, to maintain the "financial incentive to choose vaping over smoking"

Transport and Energy

• Fuel duty frozen again, with the 5p cut in fuel duty on petrol and diesel, due to end later this month, kept for another year
• £160m deal for UK government to purchase site of planned Wylfa nuclear site in north Wales
• "Windfall" tax on the profits of energy firms, which had been scheduled to end in March 2028, extended until 2029
• Air passenger duty, the tax paid on flights, to go up for business class tickets

Public debt, inflation and the economy

• Office for Budget Responsibility predicts UK economy to grow by 0.8% this year and 1.9% next year
• Growth of 2% predicted for 2026, with 1.8% in 2027 and 1.7% in 2028
• UK's inflation rate forecast to fall below 2% target "in just a few months' time"
• Underlying debt, excluding Bank of England debt, forecast to be 91.7% of GDP this year, rising to 92.8% next year
• Overall day-to-day government spending to grow by 1% in real terms over next five years

Business and Investment

• Threshold at which small businesses must register to pay VAT raised from £85,000 to £90,000 from April
• Tax reliefs for touring and orchestral productions, which had to been due to end in March 2025, made permanent

Additional measures

• £1m for a memorial to honour Muslims who fought for Britain during World War One and Two
• A new tax credit for independent UK films with a budget of less than £15m

Source: https://www.bbc.co.uk/news/business-68359756