According to sources, the UK Chancellor of the Exchequer, Jeremy Hunt, may be considering cutting taxes on business and inheritance in next week’s Autumn Statement. However, the decision will depend on economic forecasts from the UK’s primary economic forecaster. Despite the lack of a concrete decision, Hunt announced a proposal to provide £4.5bn in funding to enhance British manufacturing. He claimed that, among firms that could be, or are already, world leaders, the British Government’s budget would also help businesses in sectors such as aerospace, clean energy, automotive, and life sciences.
The Office of Budget Responsibility (OBR), which appraises the UK financial system, is expected to provide the Chancellor with the most recent economic predictions on Friday. While Hunt is reportedly mulling over potential cuts, a Treasury source confirmed that it is entirely possible that any impending decisions may be postponed until the spring. Despite previously admitting that tax cuts were “virtually impossible,” economists have estimated that the Chancellor could have over £10bn to spend on tax cuts.
To reduce the tax burden for British citizens, Hunt refused to rule out the option of cutting the inheritance tax in an interview with BBC news. Moreover, tax levels in the UK have been the highest since records began 70 years ago. Regarding business taxation, no specific measures have been reported, but one expectation is that a current tax break which allows firms to deduct 100% of the money they spend on new machinery could be extended. This policy, known as “full expensing,” comes to an end by the conclusion of the 2025 tax year.
Any potential fiscal policy changes from the UK’s Government will depend on its choices regarding self-imposed spending and taxation. The amount of money that the government is willing to devote to tax cuts and spending is subjected to its own fiscal rules. Most wealthy countries follow fiscal rules to maintain their credibility with international financial markets. The Labour Party’s Leader, Sir Keir Starmer, has refrained from commenting publically regarding the Autumn Statement until the details are released
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