Chancellor Jeremy Hunt is under increasing pressure to announce tax cuts and public spending increases after Government borrowing has been much less than expected.
The Government has borrowed a total of £19.8billion less than expected this year with borrowing at £81.7billion.
As reported in The Telegraph, economist Ashley Webb, from Capital Economics, said: “Although the Chancellor has ruled out tax cuts in the Autumn Statement, we still expect that he will have some wiggle room for tax cuts and spending rises in the March Budget.”
Many Briton face growing tax bills after corporation tax increased from 19 pecent to 25 percent in April while increasing wages are also pushing people into paying more tax.
Corporation tax is the fourth biggest source of revenue for the Government while inheritance tax receipts have increased £400million this year, reaching £3.9billion.
Joe Neal, tax manager at advisory firm Blick Rothenberg, warned the tax burden for Britons will continue to increase if ministers stick with their plans to freeze tax bands until April 2028.
He said: “The income tax take has increased by 12.5 percent this year compared to last year whereas average pay growth is currently at 8% for the private sector and 6.8 percent for the public sector.
“This is due to fiscal drag pushing individual’s income into higher tax bands and resulting in a higher proportion of people’s pay being taken in tax.
“The takings for corporation tax have also increased by 21 percent in the last year, suggesting that the increased business costs are being passed on to an already squeezed consumer.”
But Mr Neal warned that with inflation remaining at 6.7 percent in the latest figures, the Chancellor may be “stuck” between relieving tax pressure and working to bring down inflation.
He explained: “Jeremy Hunt has already managed expectations by stating that he will not be announcing any big tax giveaways due to the concern that this could contribute to inflation.
“However, with an election expected next year and with backbenchers calling for a tax reduction if the taxpayer is to be allowed any small reprieve, this could be announced at the autumn statement next month on November 22.”
Figures from Ipsos show the economy and inflation are the biggest concerns of Britons at the moment ahead of the NHS and immigration.
The Ipsos Issues Index for October 2023 found 38 percent of the public see the economy as a key issue for the country, which is almost unchanged from last month.
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