A new Chancellor of the Exchequer – what can we expect?
Thursday, 01 August 2019
On 24 July, Sajid Javid was confirmed as UK Chancellor of the Exchequer. At the top of the new Chancellor’s to do list will be whether to implement all of Boris Johnson’s tax and spending pledges made during the Tory leadership campaign and, if so, how.
The new Prime Minister’s stand out pledge is to raise the higher rate threshold, the point in which people start paying 40% income tax, from £50,000 per annum to £80,000. This change is likely to be accompanied by removing the National Insurance ceiling for employee contributions, reducing the overall benefit for high earners, but giving a boost to high income pensioners who will not be impacted by the increase in National Insurance contributions.
Mr Johnson also favours an abolition of stamp duty land tax on the purchase of residential properties up to £500,000, together with spending pledges for education and nationwide full fibre broadband.
It will be interesting to see whether Mr Javid attempts to fund all or part of the cost of these pledges from increases in taxation elsewhere or prefers to increase borrowing. With Brexit scheduled to take place on 31 October (at the latest) the timing and content of the Chancellor’s Autumn Budget speech this year is likely to be one of the more interesting in recent memory.