Chancellor Jeremy Hunt has announced significant financial changes in the Spring Budget, targeting various sectors ahead of the approaching general election. Among the key features of the Budget are major tax cuts, including a notable 2p reduction in national insurance for employees and the self-employed, marking this as the lowest personal tax rate since 1975. This reduction is projected to benefit millions, with an average annual saving of £450 for workers.

The Budget also extends support to different groups, including savers, drivers, small businesses, working parents, and those receiving child benefit. Measures like the continuation of the freeze on fuel and alcohol duties and a decrease in capital gains tax for property sales are intended to offer financial relief. However, the abolition of the special tax status for non-doms, alongside a new tax for vapers and smokers, represents a financial tightening for some.

Furthermore, the Treasury has declared an increase in air passenger duty (APD) for those flying from UK airports, especially affecting premium cabin passengers. This has sparked criticism from industry bodies, which argue that the tax hike could hamper the economic recovery of British businesses and the broader airline industry still reeling from the pandemic’s effects.

Despite the introduction of tax cuts, there are concerns that the benefits could be offset by the ongoing freeze on income tax thresholds, a measure expected to push more people into higher tax brackets due to inflation. This phenomenon, known as fiscal drag, could lead to an increased tax burden for many despite the headline cuts.

The Budget has also addressed environmental and transport concerns. It proposed a freeze on fuel duty to aid motorists but faced criticism for not taking stronger measures to promote the adoption of electric vehicles. Conversely, the rise in APD for premium cabins has been seen by some as a step towards properly taxing the aviation sector for its environmental impact.

These financial measures have been met with mixed reactions, reflecting the balance the government seeks between stimulating economic activity and managing its revenue streams. With the Budget affecting a wide range of sectors and income groups, its full impact will unfold in the lead-up to the general election and beyond.