Our predictions for Jeremy Hunt’s spring Budget

The Chancellor is under pressure to cut taxes as we head to the polls this year, but what changes can we realistically expect?

This year’s Budget promises to be one of the most consequential in years. Not only could it help determine the result of the next general election, and hence set Britain’s economic course for the next five years, but it could also see a big shake-up of our taxes – and perhaps even the abolition of that most hated of them all, inheritance tax.
Here, we cover the practicalities of the announcement itself and attempt to foresee its likely contents. We’ll update this article as the Budget approaches.
The Budget will take place on March 6. Normally the Chancellor begins to speak at about 12.30pm, as soon as Prime Minister’s questions have ended.
You can keep informed of the latest news, predictions and what it means for you in the day’s Budget blog, and we will be streaming Chancellor Jeremy Hunt’s statement live from 12.30pm.
Mr Hunt has pursued something of a “will he, won’t he” approach to possible tax cuts, seeming to promise them in one speech, then hinting that they would be unaffordable in the next. But one commentator said he had raised hopes of tax cuts among his backbenchers so much that he would “struggle to get out of the Commons alive” if he failed to do something in the Budget speech.
Blick Rothenberg, the leading tax and advisory firm, was one institution to say a 1p cut in the basic rate of income tax was a likely option. Experts at a pre-Budget conference at the Resolution Foundation, a think tank, this week agreed that a cut in the rate of income tax was the most likely of the possible ways to put more money in voters’ pay packets before the election. 
Torsten Bell, the foundation’s chief executive, pointed out that Rishi Sunak had expressed a wish to cut the basic rate to 16pc in time in his pitch to Conservative party members in the leadership election.
One alternative to a cut in the rate of income tax would be to end the policy of “fiscal drag” and raise the tax-free personal allowance to take some account of wage inflation, which has been running at high levels to keep up with prices. 
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Blick’s experts said that, while an increase in the personal allowance looked less likely than a cut in the rate of income tax this time, the Budget could outline the Government’s plans for the allowance in future.
Other possible tax changes include a cut in the rate of VAT on energy-saving materials supplied by builders (householders already benefit from a tax break if they buy the materials directly), and bringing the VAT on electricity for electric cars supplied at public charging stations in line with the lower rate that applies if you charge your EV at home.
The Chancellor could also reintroduce tax-free shopping for tourists, which might encourage more to choose Britain over other destinations. Blick said any new tax-free shopping regime could be administered by retailers rather than the Government, which meant it was likely to run more smoothly.
Could the Chancellor cut inheritance tax? Experts at the Resolution Foundation’s conference said it was most unlikely. “It would send a very strange message [to voters],” one said. However, changes such as the abolition or curtailment of the “business relief” tax break or making pension assets liable to IHT, possibly to fund a cut in the main rate of IHT, were possible. The panel also discounted the chance of any rise in fuel duty in an election year.
One possible rise, Blick said, is the imposition of VAT on the full price of a ride with Uber, Bolt or similar “ride hailing” services. Currently, VAT is charged only on the difference between the charge to the passenger and the amount paid to the driver. The change would result in a rise in the amount paid by the passenger of about 15pc, the firm said.
Blick’s experts said Mr Hunt should make more small companies eligible for the lower rate of corporation tax of 19pc by increasing the threshold. This, they said, would encourage more overseas companies to set up in Britain, because such subsidiaries are often quite small.
The Resolution Foundation panel said the introduction of a “Great British Isa” to boost investment in London-listed companies was unlikely, although other measures with that aim were possible.
Why do you never see the Speaker of the Commons during a Budget? 
Traditionally the chief deputy speaker, who goes by the title of Chairman of Ways & Means, chairs the Budget debates rather than the Speaker. The current Chairman of Ways & Means is Dame Eleanor Laing, so she is likely to preside over this year’s Budget.
By tradition, the Chancellor, unlike ministers at the despatch box at any other time of the year, may drink alcohol during the Budget speech if they wish. Former chancellor George Osborne chose to drink mineral water. Other chancellors have chosen mineral water (Gordon Brown and Alistair Darling), whisky (Kenneth Clarke), spritzer (Nigel Lawson), gin and tonic (Geoffrey Howe), brandy and water (Benjamin Disraeli) and sherry and beaten egg (William Gladstone), according to the Parliament website.
Gladstone also holds the record for delivering more Budget speeches than any other chancellor: he gave 12 of them.
What would you do in Mr Hunt’s shoes? Tell us in the comments below