British Chancellor of the Exchequer Jeremy Hunt has ten days to submit the state budget. The document was due to be submitted on October 31, but was eventually postponed to November 17, after it was delivered Monday morning to the Office of Budget Control (OBR). Something that wasn’t done with former CEO Liz Truss’s mini-budget and was even one of the reasons given for all the ensuing turmoil in the markets.
According to the Financial Times, among the proposals are to raise taxes and cut executive spending by as much as £54 billion, with the aim of plugging the huge gap in the UK’s finances, which is expected to be around £54 billion. The 40 billion.
The cut in state accounts is expected to be around £33 billion, while the tax increase is expected to be around £21 billion.
One proposal aims to unlock the so-called “triple lock” in state-paid pensions. This is a mechanism that ensures that pension payments develop in line with inflation, average income or 2.5% – whichever is higher. Thus, Hunt can measure pensions according to average income, rather than inflation, which is in the double digits in the last two readings.
One way to increase revenue to consider is the so-called “disguise tax”, a type of indirect tax that can be implemented by freezing income tax limits for another two years until 2027/2028, in order to do so. As the salary increases, so does the tax.
Among other proposals, raising taxes on dividends, as well as lowering tax deductions or tax exemptions on dividends, is being considered. It is still being examined to reduce tax benefits on the capital gains tax, which is paid on stocks and second homes.
The country is also expected to start imposing a special tax on electric vehicles for the first time.
According to the British Finance newspaper, if more savings are required, there may be a cut in foreign policy spending, which was reduced from 0.7% of GDP to 0.5% during the leadership of Boris Johnson, but the recovery was promised in 2024. However, Hunt can extend this policy to 2027/2028, saving around £5 billion annually.
The current finance minister, Rishi Sunak, must try at all costs to restore the confidence of the markets, after a rollercoaster that culminated in the departure of the former prime minister, Liz Truss.
All this comes after the Bank of England revealed that the UK is at greater risk Recession in the century.
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