Jeremy Hunt will unveil his Budget on Wednesday, amid rumours in Westminster that Rishi Sunak could call the general election for as soon as May.
The chancellor is under huge pressure from Tory MPs - not least Rishi Sunak - to come up with some voter-friendly giveaways to improve the party’s dire poll numbers.
Conservative backbenchers want to see big tax cuts - but Hunt is struggling to come up with the cash to fund them.
Here, HuffPost UK looks at some of the big announcements to look out for when he gets to his feet a lunchtime tomorrow.
National Insurance
The chancellor - according to The Times - will cut national insurance for millions of workers by a further two percentage points.
That would follow on from an identical cut he announced in the Autumn Statement last November.
Legislation will be rushed through parliament so it takes effect from April, meaning voters will see the impact in their pay packets as soon as possible.
Combined with the previous NI cut, the government will argue it has cut taxes by £900 for the average worker.
However this is against a backdrop of the overall tax burden actually being set to rise to its highest ever level.
And according to the IPPR think-tank, almost half of the national insurance give-away would end up in the pockets of the richest fifth of households.
The move is also likely to anger Tory MPs, who were keener for the chancellor to cut income tax.
However, Hunt appears to have plumped for a national insurance cut because it is the less expensive option, and is also less likely to push up inflation.
Fuel duty
Hunt is expected to extend the 5p cut in fuel duty, at a cost of £5bn to the Treasury.
Fuel duty is currently 52.95p per litre as a result of a “temporary” 5p cut announced by Rishi Sunak in 2022, when he was still chancellor.
It has not increased since March 2011, when it was frozen at 57.95p by George Osborne.
Windfall Tax
Hunt is tipped to increase the windfall tax on the profits of oil and gas companies as he tries to raise some much-needed cash for the Treasury coffers.
The so-called energy profit levy was first introduced in May 2022 after a spike in energy prices following Russia’s invasion of Ukraine.
Hunt increased the tax in November 2022 from 25% rate to 35%, and also extended it until 2028 while expanding it to electricity generators with a levy of 45%
According to Reuters, Hunt is expected to extend the levy by one more year to 2029 in tomorrow’s Budget.
Non-dom tax status
Hunt is reportedly considering stealing one of Labour’s key pledges and scrapping the non-dom tax status enjoyed by wealthy foreigners based in the UK.
The highly political move would cause a major headache for Keir Starmer and shadow chancellor Rachel Reeves so close to the general election.
Non-doms are foreign nationals who do not pay UK tax on money earned abroad.
Labour made great play of the revelation Sunak’s wealthy wife, Akshata Murty, was a non-dom.
The Conservatives have long defended the special tax status by insisting it ensures the UK remains an attractive place for wealthy people to live and invest.
But scrapping the tax loophole could hand the Treasury a £3.6bn windfall, according to research by Warwick University and the LSE.
Labour has long promised to axe the status and has pledged to spend the money on the NHS and education.
But if Hunt uses the money to pay for tax cuts at the Budget, Labour would either have to find the money to pay for its pledges elsewhere or oppose the cut in taxes.
Vape tax
Hunt is said to be considering a new tax on vaping, with higher rates for products with more nicotine. Vape products are currently subject to VAT but do not have a dedicated levy.
Sunak has made the phasing out of smoking one of his headline policies. So according to the The Guardian the new tax could be matched with a one-off increase in tobacco duty to ensure vaping remains cheaper than smoking.
Council diversity schemes
Hunt - according to the BBC - will tell cash scrapped local councils to save money by axing spending on consultants and diversity schemes.
The move would delight right-wing socially conservative Tory MPs. But the Local Government Association (LGA) said councils spent just “pence” on those projects.
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Budget 2024: What To Expect From Jeremy Hunt's Commons Statement
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05.03.2024
Jeremy Hunt will unveil his Budget on Wednesday, amid rumours in Westminster that Rishi Sunak could call the general election for as soon as May.
The chancellor is under huge pressure from Tory MPs - not least Rishi Sunak - to come up with some voter-friendly giveaways to improve the party’s dire poll numbers.
Conservative backbenchers want to see big tax cuts - but Hunt is struggling to come up with the cash to fund them.
Here, HuffPost UK looks at some of the big announcements to look out for when he gets to his feet a lunchtime tomorrow.
National Insurance
The chancellor - according to The Times - will cut national insurance for millions of workers by a further two percentage points.
That would follow on from an identical cut he announced in the Autumn Statement last November.
Legislation will be rushed through parliament so it takes effect from April, meaning voters will see the impact in their pay packets as soon as possible.
Combined with the previous NI cut, the government will argue it has cut taxes by £900 for the average worker.
However this is against a backdrop of the overall tax burden actually being........
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