(Alliance News) - A cut to national insurance, stamp duty relief as well as a freeze on fuel and alcohol duties were among the marquee tax measures that UK Chancellor Jeremy Hunt announced in his budget on Wednesday.
The tobacco, airline, and energy sectors were targeted to top up government coffers, however, as were 'non-doms'.
In addition, Hunt, in an aim to get the UK investing again, announced plans for a British ISA and also confirmed the Treasury will press on with a sale of its shares in lender NatWest Group PLC.
The budget is likely to be the last one before the UK goes to the polls in a general election, so the ruling Conservatives were courting voters.
Just before his time on the despatch box came to an end, Hunt confirmed that from April 6, there will be a further cut to national insurance, trimming the rate paid by employees to 8% from 10%. In last year's autumn statement, it had been cut from 12%.
The average person in the UK has the "lowest effective personal tax rate since 1975", the chancellor claimed.
The cut to national insurance was expected, though some measures were not as certain to be in the script. Among those, Hunt announced a cut to the higher rate of property capital gains tax to 24% from 28%. Hunt said this will increase government revenue as it will spur on more property transactions.
"I have also been looking at the stamp duty relief for people who purchase more than one dwelling in a single transaction, known as multiple dwellings relief," Hunt added, noting that the relief was designed to "support investment in the private rented sector".
"However, an external evaluation found no strong evidence that it had done so and that it was being regularly abused. So I am going to abolish it," Hunt said.
Staying with the property sector, Hunt said he will abolish the furnished holiday lettings regime in a move aimed at encouraging homeowners to turn to long-term lets, instead of short-term ones to holidaymakers, such as via Airbnb Inc.
Elsewhere, the chancellor will introduce an excise duty on vaping products with effect October 2026. Bloomberg last week Tuesday reported that he may announce a levy on vapes, in a bid to raise GBP500 million by 2028-29.
Earlier this year, the UK announced a possible plans for a crackdown on disposable vapes, with a ban expected to come into force at the end of 2024 or the start of 2025.
There will also be a "one-off" increase in tobacco duty, Hunt said.
A "one-off adjustment" to the level of air passenger duty for those with non-economy tickets, such as premium economy, business class and first class is planned, the chancellor said without providing detail.
The UK's windfall tax on oil and gas companies will go on for another year, meanwhile. The energy profits levy was announced back in May 2022, as the government looked to tax the "exceptional profits of oil and gas companies" on the back of red-hot prices following Russia's invasion of Ukraine. It is charged at 35%, meaning the total headline rate of tax on oil and gas profits stands at 75%. It had been due to end in March 2028.
Hunt said: "We want to encourage investment in the North Sea so we will retain generous investment allowances for the sector.
"We will also legislate in the finance bill to abolish the energy profits levy should market prices fall to their historic norm for a sustained period of time."
Hunt announced a reform to the individual savings account system in a bid to get Britons to benefit from the "growth of the most promising UK businesses".
A British Isa will be introduced, giving investors a GBP5,000 extra tax-free allowance to "encourage more people to invest in UK assets".
Hunt said he will proceed with a retail sale for part of the government's remaining NatWest shares this summer at the earliest, subject to market conditions and value for money.
UK Government Investments, which is owned by the Treasury, in February said it is currently in the process of working with advisers to carve up a plan for the share sale.
Holger Vieten, who is leading the work for the organisation, told a group of MPs last month: "At this point, we have been asked by the chancellor to explore a retail offer… and we are in the development and design stage. We are looking at various options as to how that could be implemented."
Vieten stressed at the time that there was no exact date for when the sale will occur but revealed that it could be in the summer at the "very earliest".
As another revenue raising measure, Hunt on Wednesday announced the abolishment of the non-domicile tax system, which he said would raise GBP2.7 billion per year. Non-domiciles are residents that only pay tax in the UK on money earned in the country. It has previously been a highly politically charged issue, with Prime Minister Sunak's wife Akshata Murty previously having non-dom status.
Hunt had earlier kicked off his budget speech by announcing the latest Office for Budget Responsibility forecasts.
Updated forecasts from the Office for Budget Responsibility, show that inflation in the UK will fall below the Bank of England's 2% target in "just a few months time", Hunt noted.
He told MPs: "When the prime minister and I came into office, it was 11%. But the latest figures show it is now 4%, more than meeting our pledge to halve it last year. And today's forecasts from the OBR show it falling below the 2% target in just a few months' time, nearly a whole year earlier than forecast in the autumn statement."
Meanwhile, the OBR expects the economy to grow by 0.8% this year and 1.9% next year.
"Overall, the economic and fiscal outlook is similar to November. While growth has slightly disappointed since then, a steeper fall in inflation and interest rates should support a stronger recovery," the OBR said.
Also announced in the budget was a plan for AstraZeneca PLC to invest GBP650 million in the UK. The drugmaker plans to invest GBP450 million "to research, develop and manufacture vaccines in Speke, Liverpool", according to a government statement.
"A further GBP200 million investment [is] announced to expand AstraZeneca's presence in Cambridge, employing 1,000 people," the UK government said.
By Eric Cunha, Alliance News news editor
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