The biggest surprise of Rishi Sunak’s spring statement was the announcement that the basic rate of income tax will be cut by one penny come 2024. This is the first cut in the basic rate since the cut to 20p announced by Gordon Brown in his last Budget in 2007, which was of course partly paid for by abolishing the 10p starting rate of tax.
Cynics will be quick to suggest that there is a long way to go before 2024 and so the tax cut might not happen. But this is to ignore the politics. The most likely date for the next election is May 2024. It would be bizarre, and electorally disastrous, for a government to announce that it intends to cut taxes just before that date and then fail to do so. Sunak has lashed himself – and the government – to the mast.
You can be certain that the Treasury will use the primacy of this tax cut to knock back various demands for spending in the next two years.
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