Budget day sets the scene for the tax year ahead, and is especially exciting in a General Election year. As we know, there is no ‘perfect’ mix of taxes, every tax has advantages and trade-offs. The most recent messages about public finances seem to suggest that the Chancellor has limited fiscal scope to cut taxes, but with so many issues to be tackled it will be interesting to see what he decides to do.
On 6 March we’ll be reacting live to the Spring Budget on our social media channels and updating our Budget webpage live. The following day at 9am I’ll be chairing the PwC Spring Budget 2024 reactions webcast, where I will be joined by a panel of tax and economics experts to reflect on the Chancellor’s announcements and what they could mean for individuals, employers and businesses. You can register now to join us live on 7 March or watch on demand.
How the Chancellor chooses to use carrot incentives and taxation sticks to encourage behavioural change will be very telling - we know the public is hungry for change. From the perspective of businesses, there were significant announcements last year relating to capital allowances and research and development relief, and I wouldn’t expect such big changes in those areas this time around. Having said that, any lift to businesses would be welcome and we expect to see some surprise announcements - even in an election year governments have been known to issue a stream of proposals.
Grabbing the headlines in the last few days has been the suggestion that the Chancellor will abolish or scale back the UK non-dom rules. That would be a lever to fund tax cuts elsewhere and, as an idea already proposed by the opposition, an interesting move politically.
I’m particularly interested in whether there are any announcements regarding workforce issues. Our recent Golden Age Index shows that since the pandemic, the number of older inactive workers has increased by 244,000. Support and incentives to convince older workers to return to work could provide a much needed big boost to the economy.
"Support and incentives to convince older workers to return to work could provide a much needed big boost to the economy."
I would like to see a focus on skills development - perhaps linked to improvements to the Apprenticeship scheme. This was highlighted as an important issue by the Government a couple of years ago, but we haven’t heard much since, and perhaps this would be a good time to revisit it.
Also, arguably there has been more in recent years to support the older demographic. I wonder whether the Chancellor will announce measures to help younger people, and those looking to get onto the property ladder.
As always, there is much speculation as to what the Chancellor will announce on 6 March and many possibilities of how he will encourage change to drive the economy.
