Background:
On March 6th, Chancellor Jeremy Hunt prepares to deliver the 2024 Spring Budget.
As always there is a lot of speculation about potential tax cuts, not least as a general election is on the horizon. Against the backdrop of the UK economy entering a brief recession at the end of 2023 there are a number of levers the Government may decide to pull. In this article, we'll explore how the budget might impact you.
Potential Areas of Focus in the 2024 Budget:
1. Income Tax:
An old favourite to help people feel better off - the government has hinted at a desire to cut taxes, but concerns about available funds have surfaced.
2. National Insurance (NI):
Could this be cut again following on from the 2023 Autumn Statement, where the chancellor announced an NI cut affecting 27 million workers?
3. 99% Mortgages:
Support for helping first time buyers is a common debate pre budget. There is talk about introducing 99% mortgages, potentially easing access to homeownership for first-time buyers through just a 1% deposit. However, some big questions exist about how this would be implemented and the risks involved.
4. Stamp Duty:
Historically this has been adjusted to help benefit first-time buyers. Will more changes take place next week? Will it help you get on the property ladder?
5. Inheritance Tax:
There is speculation about a cut in inheritance tax (IHT). The basic inheritance tax threshold – also called the nil-rate band – is £325,000 and hasn’t changed since 2009. If however, someone leaves their entire estate to their husband, wife or civil partner when they die there are further allowances. The surviving partner can also “inherit” the £325,000 allowance. When the partner dies, he or she therefore will have a joint £650,000 tax-free allowance.
5. Child benefit:
Currently, anyone claiming child benefit will start losing some of their benefit as soon as one parent earns more than £50,000 and will lose all of it once that parent earns £60,000 - even if their partner, if there is one, doesn't work. However, in a family where parents can each earn £49,999 each (a total of £99,998) they get to keep all their child benefits. Will the Government address this imbalance?
Conclusion:
There is, as usual, lots of speculation ahead of the Budget. There is usually one big surprise so all eyes will be on Mr. Hunt next week!
Rest assured, CreditLadder will bring you the news as it happens.
Remember, CreditLadder can help you improve your credit score.
CreditLadder can improve your credit position by reporting your rent payments. CreditLadder is the first way to improve your credit score and position across all three of the main Credit Reference Agencies in the UK, namely Experian, Equifax and TransUnion. Building up a high credit score has a lot of benefits, including helping you access finance at better rates - this can also help save you money. CreditLadder also runs a free mortgage application service in partnership with Tembo which will tell you how much you could borrow.
Remember the content provided in this article is for information purposes only and should not be considered as advice.