The Spring Budget's unexpected twist has the Chancellor on a tightrope, a Cumbria-based accountancy firm has warned.

Lamont Pridmore predicts a 'budget for growth', laying out the challenge for the Chancellor against the backdrop of a recession and high inflation rate ahead of his announcement on Wednesday, March 6.

Additionally, the imminent general election due before Tuesday, December 17 adds pressure amidst the nation's economic ambivalence.

 

 

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A variety of policies are expected, including further reductions in National Insurance, which had already seen a two per cent drop in the 2023 Autumn Statement.

Similar reductions are indicated for tourism and hospitality businesses in the form of VAT cuts.

The proposed abolition of non-domiciled tax status further complicates the Chancellor's task.

Graham Lamont, the managing partner at Lamont Pridmore, said: "It is a difficult tightrope to walk between giving tax cuts ahead of an election, and appearing to keep things balanced, minimise the deficit and repay debt.

“It seems likely that it will be more of a ‘for everyone’ tax cut, rather than purely for businesses or individuals."

He added: “We can see this in the speculation that there would be a two pence tax cut on Income Tax rates.

"It now looks far more likely that this will apply to National Insurance instead.

"This will still benefit huge swathes of the population, but it will ultimately cost the Treasury less – striking that critical balance."

Since the adjustments need to fall in line with the government's projected spending deficit, the Chancellor will need to perform a delicate balancing act.

Mr Lamont said: "While the goal is likely to be to reduce the tax burden on businesses, entrepreneurs and employees, it is clear that the Chancellor will need to proceed with caution."

He concluded: “We ultimately understand that this is an unnerving time for businesses and individuals as it’s hard to plan ahead of a Budget like this one.

“We’re always here for advice and support when legislation changes affect your financial planning.”