In the forthcoming budget announcement scheduled for March 6th, Chancellor Jeremy Hunt is anticipated to prioritise other fiscal measures over reductions in stamp duty and inheritance tax, reflecting a more restrained approach due to limited financial flexibility.
Initial ambitions for comprehensive tax cuts have been tempered by less favourable official forecasts, leading to a refocused fiscal strategy that departs from earlier plans to alleviate stamp duty and inheritance tax burdens.
Amidst these recalibrated expectations, the Chancellor is set to introduce a 1 percentage-point decrease in employee national insurance contributions, which is estimated to cost around £4.5 billion annually. This move, alongside a continuation of the fuel duty freeze at an expense of £1 billion per year, forms the cornerstone of the budget’s tax-related adjustments.
These decisions come as the government confronts a tighter fiscal landscape, with the Office for Budget Responsibility recently revising its projections to present a diminished £13 billion of fiscal headroom, half of which is intended to be preserved as a reserve.
The reconsideration of tax reductions, including the previously contemplated 2p cut in income tax—a measure with an associated annual cost of £13.7 billion—underscores the financial prudence necessitated by current economic conditions. Consequently, the government has decided to postpone discussions on cuts to stamp duty and inheritance tax, as well as proposals to extend child benefit to middle-income families. These considerations are deferred for potential inclusion in an autumn statement or as part of the Conservative Party’s electoral platform. Commenting on the property predictions for the budget, Bernadette Bennett, head of the legal sector from Moneypenny said:
“There have been strong rumours that the Chancellor’s 2024 Budget will seek to provide more help for people wanting to buy their own home. Exactly what this looks like is yet to be seen, but there is an expectation that a new Help to Buy scheme could be announced, along with higher property purchase limits on Lifetime ISAs.
Alongside this, there are reports the government is considering a scheme allowing young people to get on the property ladder with just a 1% deposit. The 99% mortgage plan would go even further than the Help to Buy scheme, which helped first-time buyers purchase new-build homes with only 5% deposits.”
