EY Budget commentary: "A bare bones Budget for tax"

Chris Sanger, EY’s Head of Tax Policy, comments on the Chancellor’s Spring Budget

“From a net tax cut perspective, the Chancellor was pretty restrained, spending no more than £14bn a year across 2023/24 to 2025/26. Of that amount, over 90% related to just two measures, being the full expensing for large investment and the fuel duty freeze. Beyond this, the remaining 28 new tax measures net just £1bn on average per annum in additional revenues.

“Some businesses facing challenging times ahead may have hoped for a reprieve from the rise in the rate of corporation tax. While that hasn’t transpired, many businesses may welcome the chance to avoid having to learn yet more tax rules. While the Chancellor hasn’t saved the Office of Tax Simplification, perhaps he has taken on board its mission and sought to constrain the aspirations of his most enthusiastic officials. 

“The largest tax rise actually came from spending money on his own officials, with the investment in HMRC’s debt management capability bringing in almost £400m in 2024/25.  Beyond this, the rises were spread widely, with yet more freezes in thresholds, this time for those with savings and those running casinos, and increase in duty on tobacco. Other revenue raisers related to removing relief that had been previously extended beyond the UK’s shores to those in the European Union. 

“All in all, in contrast to the multiple Statements of last year, this Budget was much more like an Economic Statement. The Chancellor let slip in his speech that he was planning to have an Autumn Statement, ignoring the aspiration of his predecessor-but-four, Philip Hammond, to move the Budget to the Autumn. This, alongside the OTS, may be one of the former initiatives that will be left as a footnote in history.”