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Chancellor Hunt Weighs Tax Cuts and Vaping Tax as Budget Nears

Amid warnings from the IFS, the Chancellor considers tax adjustments and new levies to bolster election prospects and address public finance concerns.

Overview

  • Chancellor Jeremy Hunt is considering tax cuts and a new vaping tax ahead of the Budget on March 6, amidst pressure to boost the Conservative Party's election prospects.
  • The Institute for Fiscal Studies (IFS) warns against tax cuts without clear funding plans, highlighting the weak economic case and potential strain on public services.
  • Proposed tax cuts include a reduction in employee national insurance and an extension of the fuel duty freeze, with a vaping products levy expected to raise over £500m by 2028-29.
  • The IFS calculates Hunt would need to find £35bn in cuts from public services to fund pre-election giveaways, amid concerns over the UK's high tax burden and public finance health.
  • Speculation around the Budget also includes potential changes to stamp duty, inheritance tax, and support for first-time home buyers, but with warnings about the impact on public finances and services.