Chancellor Jeremy Hunt will present his Spring 2024 Budget on Wednesday March 6.
There has been much speculation about whether he will announce tax cuts before the next general election.
Reports suggest that several measures are being considered to raise money to finance tax cuts, the most recent being increasing taxes on business class flights. Mr Hunt would also consider removing non-dom tax status and taxing vaping.
The Treasury declined to comment.
What is the budget?
Each year, the Chancellor of the Exchequer – who is responsible for the government's finances – makes a budget statement to the House of Commons.
This outlines the government's plans to raise or lower taxes and outlines its spending commitments on health, schools, police and other public services.
The Treasury publishes a report alongside the budget, which gives more detail on the measures and their cost.
The independent Office of Budget Responsibility (OBR) – which monitors public spending – also evaluates the plans.
Opposition Labor leader Sir Keir Starmer will respond to the Budget as soon as Mr Hunt takes his seat.
MPs will then debate the content, before the government presents a finance bill to transform the budget proposals into law.
When is the 2024 budget?
The spring 2024 budget will take place on Wednesday March 6.
The Chancellor's speech usually starts around 12:30 UK time and lasts around an hour.
It will be broadcast live on BBC iPlayer and the BBC news website.
This will likely be the last budget before the general election, which must be by the end of January.
How is the British economy doing?
The British economy entered recession at the end of 2023after having declined for two consecutive three-month periods.
The recession is not expected to last long. Andrew Bailey, Governor of the Bank of England told MPs it might already be over.
But even as the economy grows in the first three months of 2024, many households are still struggling financially. after two years of price increases.
What could the spring 2024 budget contain?
Income taxes
The government has suggested it wants to cut taxes. But it also suggests that there may not be enough money to make big changes.
Reducing the main rate of income tax by 1p would cost £7 billion, according to the Resolution Foundation think tank.
Alternatively, the government could spend a similar amount to reverse the current freeze on the amount of money people can earn before they start paying tax or qualify for higher rates.
Allowing tax thresholds to rise again in line with inflation would mean millions of people would pay less tax.
In January, The International Monetary Fund (IMF) has warned the UK not to cut taxes.
The Institute for Fiscal Studies (IFS) think tank also said the government should not cut taxes without explaining how it could finance them.
national insurance
The BBC understands that the government is considering further cuts to the National Insurance (NI) budget.
In the 2023 Autumn Statement, the Chancellor announced a reduction in NI for 27 million workers which came into force in January. Self-employed NI rates will fall in April.
A further 1% cut to NI would cost £4.5 billion a year.
Obligation of air passengers
Air travel for people traveling in business class could become more expensive under another measure apparently being considered by the Treasury.
Reports indicate that an increase in air passenger taxes for business class passengers is under consideration.
Air passenger rights vary depending on the distance traveled and the class you are in.
Currently, business class passengers must pay £13 in customs duty for domestic flights, £26 for flights up to 2,000 miles, £191 for up to 5,500 miles and £200 for flights beyond.
Non-dom tax status
The government is reportedly exploring the possibility of removing the tax status enjoyed by people who live in the UK but whose tax domicile is overseas.
Non-domiciled people, often called non-doms, only pay UK tax on money earned in the UK.
They do not have to pay UK tax on money earned elsewhere.
Removing non-dom tax status could raise £3.6 billion a year, suggests research by the London School of Economics and the University of Warwick.
Oil and Gas Windfall Profits Tax
A windfall tax was introduced for oil and gas companies in 2022 after energy company profits soared when Russia's invasion of Ukraine pushed up prices.
The Energy Profits Levy applies to profits from the extraction of UK oil and gas, and in its first year. it raised £2.6 billion.
It is expected to last until March 2028. However, reports suggest that the government is considering extending it for another year.
Vape
A UK-wide ban on disposable vapes has already been announced.
The government also considering a new tax on vapes.
Vaping products are subject to value added tax (VAT), but unlike tobacco, they are not currently subject to a separate levy.
Fuel tax
Fuel taxes have been frozen since 2011, so a change could be unpopular.
But a 5p fuel duty increase has been planned for the end of March.
The Resolution Foundation estimates that removing it would cost £2bn in 2024-25.
Inheritance tax
A reduction in inheritance tax (IHT) would benefit the wealthiest families.
Typically, only 4% of assets are subject to IHT, or around 27,000 per year.
However, the Chancellor may consider changing this threshold to reflect rising house prices.
Abolishing it completely would cost £7 billion, according to the IFS.
Child care
The government has already announced an expansion of free childcare places in England, from April.
But in January the chancellor admitted that current child benefit rules could be unfair.
Currently, claimants who earn more than £50,000 lose part of their family's child benefit – but a family where both parents collectively earn more than £50,000 receives the full amount.
The chancellor may decide to raise the threshold at which this applies.
Holiday rents
The government already cracking down on vacation rentals.
And it could detail new controls in England designed to prevent local people being priced out of the housing market.
Homeowners may need council permission to convert their home into a short-term rental.
99% mortgage
According to reports from Financial Timesthe chancellor can introduce 99% mortgages.
This could make it easier for first-time buyers to access housing, as they would only need a 1% deposit.
But critics have warned that such a system could put borrowers at risk of negative equity, if falling house prices meant they owed more than their property was worth.
And other experts stressed it would not meet the need to build more homes across the UK.
Does the budget affect all regions of the UK?
Some parts of the budget, such as defense spending, affect the whole of the UK.
Others, like education, only concern England.
Indeed, Scotland, Wales and Northern Ireland make their own decisions in this policy area.
Scotland has the power to levy income tax, meaning its rates differ from those in the rest of the UK.
The Scottish Government presented its budget for the 2024-2025 fiscal year in Decemberand announced two tax increases taking effect in April.
If the government announces additional spending in areas that only concern England, other nations receive an equivalent amount of extra money to spend as they wish, according to a rule. called the Barnett formula.
