Displaying items by tag: tax

In the 2024 Budget announcement, Chancellor Jeremy Hunt introduced tax cuts to bolster the Conservative Party's prospects. He reduced National Insurance by 2p, following an earlier cut in January. This move was labelled a "con" by Labour, suggesting it would disadvantage many. Significant changes in the Budget included raising child benefit thresholds, introducing a vaping levy, and eliminating non-dom tax status. Despite speculation, income tax was not reduced, but National Insurance for employees was lowered from 10% to 8%, and from 8% to 6% for the self-employed. Child benefit eligibility was expanded, affecting around 170,000 families. The chancellor claimed these NI changes would save an average employee earning £35,000, about £450 annually. Critics, including Labour and the Liberal Democrats, accused the Budget of being a weak attempt to cling to power, failing to effectively address public service issues, high taxes, and zero growth. Some Tories, including former ministers, expressed disappointment over the lack of income tax cuts. The Budget also announced extended support for cost-of-living pressures and a freeze on alcohol and fuel duties, while new taxes on vaping and tobacco were introduced. Public sector efficiency and technology investments, particularly in NHS IT systems, were highlighted as key initiatives.

The UK government plans to implement a new tax on vaping products starting October 2026, announced by Chancellor Jeremy Hunt during the Budget speech. This move aims to deter non-smokers from starting vaping while maintaining vaping as a cost-effective alternative for smokers wishing to quit. The tax's specific details will be determined through a consultation process. Currently subject to a 20% VAT but exempt from excise duty, vaping products will see this change with the new tax. Additionally, the government plans to increase tobacco duty as a one-off measure, ensuring vaping remains less expensive than smoking. This step aligns with the government's broader strategy, including proposed bans on disposable vapes and restrictions on vape flavours and packaging. However, the vaping tax has drawn criticism. Simon Clark from Forest, a smokers' advocacy group, called it counterproductive, and Christopher Snowdon of the Institute of Economic Affairs criticised it as a "cynical cash grab," detrimental to those who have switched from smoking to vaping.