Chancellor Rachel Reeves will present the Spring Statement on March 26, with a backdrop of geo-political upheaval, mounting pressures and a stumbling economy.
Although it was initially predicted to be a “non-event”, the spring statement is slowly turning into a major concern for some finance experts with tax, ISA and inheritance changes potentially on the horizon.
Jason Hollands, managing director at Evelyn Partners, explained that even in the face of these growing fears, everyday Brits may not need to worry too much.
He explained: “In principle, the Spring Statement should not see any changes to tax policy, especially given that most of the measures announced in Rachel Reeves’ October Budget have yet to come into force.”
It’s worth noting that the chancellor still holds the power to make more tax changes in the Spring Statement but Jason noted it’s unlikely as this could indicate she has “lost control”.
Instead, the finance expert predicts the Spring Statement will bring “spending cuts rather than tax rises”, especially because the Chancellor will be “boxed in” by Labour’s manifesto pledge not to raise the taxes of working people.
If there are any tax changes, Jason believes it will be a further extension to the frozen personal allowances and inheritance tax thresholds.
These “stealth taxes” could see millions more paying higher rates of income tax and may even cause some people to be taxed on their state pension if thresholds are frozen while the triple lock stays in place.
He explained: “The freezes have been a more powerful measure in terms of raising tax revenues than a couple of pence on the basic rate of income tax would have been.”
Another potential announcement Jason believes could be dished out in the Spring Statement is a review on tax that could prompt major changes in the next Budget, specifically the gifting scheme in inheritance tax which he believes is “next on her hit list”.
Over recent weeks there’s been speculation that the chancellor will overhaul the tax exemptions on ISAs but the expert noted this is “unlikely” to make it into the Spring Statement and will probably only be addressed in the next Budget speech.
