PM under pressure from MPs to lower taxes ahead of general election
The Treasury has announced that the 2024 Spring Budget will be held on 6th March, with leading Tory MPs urging the Chancellor and Prime Minister to cut taxes impacting contractors and freelancers.
Confirmed on X (formerly Twitter) on 27th December, the announcement has fuelled media speculation over potential tax cuts, with Rishi Sunak looking to secure the Conservative Party’s position before the country goes to the polls.
Jonathan Gullis, MP for Stoke-on-Trent North, is one of many Conservative MPs lobbying for tax cuts – including the cancellation of IR35 reform, according to The Telegraph.
A general election had been expected to be held at some point in 2024. However, the announcement of an early Budget – in the first week of March, rather than later in the month – has led to speculation that an election may be held in the first half of the year.
Regardless, with an election looming, there is more pressure on the Chancellor, Jeremy Hunt, to deliver meaningful tax cuts in March.
Contractors offered little at recent budgets
While recent budgets have offered some respite for sole traders and other self-employed workers, limited company contractors have faced higher taxes.
An increase to the headline rate of Corporation Tax and a lower tax-free Dividend Allowance are just two recent examples. Combined with IR35 reform, limited company directors face a challenging tax landscape.
As well as calling for the end of IR35 reform, the MP for Stoke-on-Trent North, Jonathan Gullis, said that “axing inheritance tax is something we should do, just not yet”.
Instead, he suggested the Chancellor should focus on increasing the threshold for higher rate income tax and cutting the basic rate. This would be in line with Sunak’s commitment to cut the basic rate to 19%,
Another MP, Neil O’Brien, suggested that many more voters “want to cut taxes that fall on low to middle earners”, rather than inheritance tax, citing polling data from Ipsos Mori.
Spring Budget is government’s “last throw of the dice”
Olney also suggested it was “too late for Jeremy Hunt to turn the tide” on the Conservative’s high-tax regime, pointing to the “flat-lining” economy as evidence of the Chancellor’s “record of failure”.
Similarly, Labour’s shadow financial secretary to the Treasury, James Murray, accused Sunak of being “a desperate Prime Minister”, and stated that the Spring Budget won’t undo “years of economic failure under the Conservatives”.
“The tax burden is set to be the highest in 70 years, with 25 Tory tax rises since the last election alone, and economic growth is on the floor”, Murray added.