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The Chancellor is expected to include a range of new revenue-raising measures in his next Budget to fund pre-election tax initiatives.
Jeremy Hunt reportedly wanted to bring in a 2p cut to National Insurance, on top of the same cuts he offered in his Autumn Statement.
However, these hopes are said to have been dashed after the Office for Budget Responsibility (OBR) submitted a worse-than-expected fiscal outlook to the Treasury.
It is understood the Prime Minister is still considering a 1p cut to National Insurance, and Treasury officials will spend the weekend trying to balance the books ahead of Mr Hunt’s statement on Wednesday.
Mr Hunt is also reportedly considering introducing some new taxes and reforms that could offset the cost of the tax cuts he would introduce.
non-dom tax reform
Amount that can be raised: £3.6 billion per year
The chancellor is reportedly considering abolishing non-Dom tax status to raise funds for other tax benefits.
Labor has long promised to scrap the policy to raise funding for the NHS, and the Conservatives have criticized the policy in the past.
report on telegraph paper and times It has been suggested that abolishing the non-domiciled tax system could raise an estimated £3.6 billion a year.
However, a 2022 report from the London School of Economics (LSE) suggests that £3.2bn could be raised annually, with around £10.9bn of offshore income currently due to non-Dom status. Not taxed.
The report also found that past tightening of regulations on non-doms resulted in very few people leaving the UK, at just 0.2%.
The LSE also estimates that £2bn a year could be raised if the deadline for individuals with non-dom status to have to pay tax in the UK was reduced from 15 years to four years.
The so-called ‘non-dom’ status can be applied for by anyone who was born overseas or whose father was born overseas and has lived in the UK for less than 15 years.
Anyone with overseas income of more than £2,000 must report it on their tax return. You can then choose to pay UK tax or claim the so-called ‘remittance basis’.
Claiming a remittance basis means you only pay UK tax on the income or profits you bring into the UK, and you will have to pay an annual fee if you have been resident in the UK for a period of time.
new e-cigarette tax
Amount that can be raised: 500 million pounds per year
In a bid to raise revenue and make it harder for children to buy e-cigarettes, the Prime Minister is expected to announce next week the introduction of an “e-cigarette product levy” on the import and manufacture of e-cigarette products.
I The newspaper first reported last month that Mr Hunt was considering a new tax on e-cigarettes to further crack down on the growing use of e-cigarettes among young people.
Under the plan times and telegraph According to reports, the tax will be levied based on the liquid contained in e-cigarettes, with higher levels for those with higher nicotine content.
There will also reportedly be a one-off increase in tobacco tax to keep the price of e-cigarettes cheaper than smoking, with these two changes costing up to £500m a year by 2028-2029. income could be generated.
This comes after the government announced a ban on disposable e-cigarettes, with the products set to be removed from sale by the end of 2025.
As part of the pledge to achieve a ‘smoking-free generation’, new laws have also been introduced making it illegal to sell tobacco products to people born after January 1, 2009, and alternative e-cigarettes such as nicotine pouches have been introduced. is also prohibited. Outlawed.
public sector productivity
Amount that can be raised: Total of £1.8bn by 2029
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The Treasury has announced the new investment as part of a drive to “increase public sector productivity”, claiming it will deliver significant savings over the next five years.
In a statement, the department said the £800m investment in public services was for “the long-term decisions needed to strengthen our economy and give people the chance to build richer, more secure lives for themselves and their families”. He said it represented a “new focus.” ”.
Changes brought in include ramping up the use of artificial intelligence across Whitehall and equipping police officers with new technology such as drones to “free up thousands of hours of administrative time”. is included.
The government will also introduce 200 more children’s social care homes in England and guarantee faster NHS test results for 130,000 patients, including those awaiting cancer results. be.
The Treasury claims the changes will deliver benefits of £1.8bn by 2029.
Holiday let crackdown
Amount that can be raised: 300 million pounds per year
Another revenue-raising measure said to be under consideration is the repeal of the Furnished Holiday Home (FHL) system, which provides additional tax credits for properties rented out to vacationers.
These include income tax relief on the cost of property amenities not available for private rental, and the ability to reduce capital gains tax in some circ*mstances.
This discount only applies to properties that can be vacation rented for at least 210 days per year and are rented out for at least half of that period.
according to Sunday Timesby removing these tax breaks and bringing FHL properties on par with other rental properties, the Treasury could gain around £300m a year.
