After the multiple fiscal statements in 2022, which often reversed changes that had only recently been announced, the last few months have been relatively tranquil on the tax front. The Budget contained high-profile announcements of changes to childcare and pensions, but the former only begin being phased in next year and the latter only affect a small minority of taxpayers. Since April, most companies are paying significantly higher corporation tax rates, but this was legislated two years in advance. Most income tax and National Insurance allowances and thresholds are now frozen until 2028, which will bring many more people into paying tax (or paying it at higher rates) as salaries increase, particularly in an era of high inflation. The next Budget is likely to be the last before a general election so, despite the difficult economic background, it will be surprising if Jeremy Hunt, like Chancellors before him, doesn’t find some money for tax cuts and, possibly, extra spending on electorally sensitive areas such as the NHS or schools. Whichever party is in power after the next General Election, it is likely that major tax reform will be high on the agenda, so we may look back fondly on this period of relative calm.
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