On 6 March, Hunt will provide an update to Parliament and the public on the state of the UK economy since the Autumn Statement in November.
He will also announce any further economic plans for 2024/25 and beyond – these could include tax cuts, ISA reform, changes to the child benefit threshold and low deposit mortgages.
With a General Election looming, the Conservatives will be looking to win votes due to Budget policies – so it could be an interesting one.
We’ve taken a look at what could be in the spring Budget.
Budget 2024: Low deposit mortgages
There are also rumours the Chancellor could introduce Government-backed 1 per cent deposit mortgages.
However, there has been a mixed reaction to the news from within the mortgage industry, with some stating that the 99% mortgages could help first-time buyers, while others feel they could push up house prices.
Tax cuts
Hunt has hinted at the possibility of tax cuts in the spring Budget. Cuts could be made to income tax, VAT or inheritance tax.
Speaking during his visit to the World Economic Forum, in Davos, Switzerland, Hunt said that countries with lower taxes have more “dynamic, faster-growing economies”.
Nina Skero, chief executive at the Centre for Economics and Business Research, said: “There is considerable speculation that any fiscal headroom that the Chancellor can find, or engineer, will be used to fund a cut in the basic rate of income tax. As with the NIC cut introduced in January, it may be that another 2 per cent cut is announced to bring the basic rate of income tax down to 18 per cent.”
Tom Selby, director of public policy at AJ Bell, said: “Inheritance tax could also be in the Chancellor’s sights at the Budget. The tax, while only directly affecting a small proportion of UK households, is widely disliked, so increasing the thresholds at which it is applied – or even abolishing it altogether – could be a popular pre-election giveaway.”
As well as looking at tax on individuals, the Chancellor might also explore tax cuts for business in an effort to boost the economy. There are lots of ways to do this, like cutting employer National Insurance, reducing headline rates of corporation tax or putting tax breaks in place for companies that invest in growth.
Hunt could also raise the VAT registration threshold. The VAT threshold is the volume of annual turnover at which businesses are required to register for value-added tax. The threshold has been £85,000 since 2017 and is viewed as a barrier to growth for some businesses.
Budget 2024: ISA simplification
AJ Bell is urging Chancellor Jeremy Hunt to consider radical, long-term simplification of ISAs.
The investment company is calling on Hunt to “supercharge” the Lifetime ISA (LISA) by reducing the government-imposed early withdrawal charge from 25 per cent to 20 per cent and increasing the minimum property price to account for rising house prices.
It also suggests increasing the overall ISA allowance from £20,000, creating a mechanism to peg the allowance to inflation and removing ISA funds from inheritance tax (IHT).
Selby said: “The Budget could be this Chancellor’s final opportunity to strip unnecessary complexity out of the ISA rules and demonstrate he is on the side of Brits who do the right thing and save for their financial future.
“As the Treasury and FCA pursue reforms to improve engagement and tackle the ‘advice gap’ through the Advice Guidance Boundary Review, it is more important than ever the financial products they engage with, including ISAs, are as straightforward as possible.”
Increase of child benefit threshold
The Chancellor could also be considering a possible rise to the £50,000 High Income Child Benefit Charge threshold, introduced by the Conservatives in 2013.
Under current rules, claimants have to pay back 1 per cent of their family’s child benefit for every extra £100 they earn over this threshold each financial year.
If you or your partner earns £60,000 or more, the charge is equal to the full amount of child benefit claimed.
But critics say the threshold is unfair, as it means a household with one person earning £60,000 doesn’t receive any child benefit, but a household with two people each earning £49,999 would get the full amount.
