westminster autumn

No respite for self-employed, with Autumn Budget tax cuts unlikely

Treasury’s focus is to “deliver the Prime Minister’s pledge to halve inflation”

Jeremy Hunt has insisted that his priority at the Autumn Budget is to continue cutting inflation rather than introducing tax cuts – despite the impact of tax increases and reforms on the UK’s 4.3m self-employed workers. 

Speaking over the weekend during interviews on Sky News and with the BBC’s Laura Kuennsberg, and as reported by the Telegraph, Hunt was keen to reinforce his own approach to managing economic growth.

Almost a year since Liz Truss’s unprecedented day of tax cuts, the Chancellor said he remains focused on halving inflation to “put money in people’s pockets”.

While this is positive, taxes remain high. The effects of high taxes are particularly pronounced for small businesses and the self-employed, and have been further magnified by the cost of living crisis.


Looking ahead to the Autumn Budget

In last year’s Autumn Budget, Hunt reversed a number of tax cuts introduced by the former Prime Minister, Truss. This included reinstating the additional rate of income tax and reversing the planned 1% cut to the basic rate.

Other measures announced last autumn came into effect at the start of this tax year, such as the increase to the headline rate of Corporation Tax and a reduction to the tax-free dividend allowance.

Despite facing calls from a number of Conservative MPs to introduce tax cuts, the Chancellor has made his priorities clear. However, this is at odds with the recent promise from the Treasury chief, Victoria Atkins, to make the tax system fairer.


“Now is the time to see the job through”

Instead, Hunt has insisted that his focus remains on getting inflation closer to the Bank of England’s 2% target. Speaking over the weekend, he identified that “there are two ways to bring the tax burden down”.

“The first is to grow the economy and we’re making good progress on that. The second is to spend taxpayers’ money more efficiently,” he said. This means avoiding “easy decisions” like cutting taxes and instead focusing on “long-term” objectives.

“What people want from a Chancellor, what people want from their Prime Minister, is not people who are going to take the easy decisions, but people who are going to take the right decisions for the long-term [health] of the British economy,” Hunt said.

“That’s what we’re doing and we can see that the plan is working,” he added. Hunt also noted that the Bank of England estimates inflation “will fall down to around 5%” after September.

The Chancellor suggested that driving down inflation would ease the financial pressures that workers and families are facing.

“As we move into autumn, I know family budgets are still stretched, but inflation is coming down and now is the time to see the job through. 

“If we’re going to put money in people’s pockets, quickly, the fastest thing I can do is deliver the Prime Minister’s pledge to halve inflation,” he said.

“That puts not one pence in the pound which might be a tax cut but five pence in the pound in people’s pockets, which they wouldn’t have had if inflation stayed high.”

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