In the upcoming spring budget, Chancellor Jeremy Hunt is anticipated to prolong the 5p reduction in fuel duty, a measure initially introduced by Rishi Sunak in 2022 and extended in March 2023. This continuation, expected to be announced on Wednesday, would maintain the fiscal stance initiated to alleviate fuel costs for UK motorists, despite its £5bn impact on the Treasury.
The extension defies the standard policy of indexing fuel duty to inflation, a practice halted since 2011. Amidst criticisms regarding the temporary nature of the freeze and its implications for economic forecasting and retail profit margins, the government perceives the move as a strategic tax relief ahead of forthcoming elections. Additionally, considerations for a 2p cut in national insurance suggest a broader fiscal strategy aimed at tax reduction, despite the constraints posed by high interest rates and sluggish growth. The budget's focus extends to potential adjustments in national insurance and non-dom tax status, reflecting the Conservative government's fiscal priorities in the lead-up to the next election cycle.
Source: news.sky.com