Five potential personal tax cuts have been named by Hargreaves Lansdown as potential announcements in the upcoming mini-budget, which is anticipated on September 23.
National Insurance budget cuts are expected. This is undoubtedly a top priority because Liz Truss constantly promised to do that during the leadership competition.
A discussion of eliminating environmental fees from electricity bills is also anticipated. This has already been stated as a part of the Energy Price Guarantee.
A VAT reduction during the summer is also possible. There was talk of a reduction, with some saying the 20 per cent rate may be lowered to 15 per cent.
Additionally, a commitment to reassess the current tax structure, which includes inheritance tax, may be made.
Finally, there may be mention of potential tax benefits for individuals who take time off work to fulfil their caregiving obligations.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown: “We’ll see a major change of direction in this Mini-Budget, as Kwasi Kwarteng drives his growth agenda, fuelled by deregulation and tax cuts, in the belief it will ease the cost-of-living crisis and boost growth. But while it’s likely to offer immediate easing of the squeeze on household budgets, only time will tell whether it will improve the landscape for good, or steer us into dangerous territory.
“Tax cuts will help us all in the immediate future, cutting our outgoings during a time of runaway inflation. It is being done in the belief that this will then help people spend more and companies invest more, both of which would support growth.
“However, this comes at a cost, and there’s the risk it could end up damaging our financial resilience over the longer term. There’s also the question of whether there will be enough in this announcement to support those on the lowest incomes, or to help us build our long-term financial resilience.”