Leonie McCann

Yes, so Budget 2026 is to be announced tomorrow.

What we know so far or what's been alluded to is that it should be a £9.4 billion budget package.

About £7.9 billion will be in spending and about £1.5 billion in tax cuts.

So the rumours so far are that we will see a VAT cut coming through for the hospitality sector.

Very controversial, but a sector that's been struggling and lobbying hard for it.

So it's expected that VAT will be reduced from 13.5% to 9%, and the estimated costs to that are 870 million.

So far, we're not expecting any income tax packages.

The relatively small budget tax package of 1.5 billion doesn't leave a lot of room for any income tax or USC changes.

Exactly.

And then elsewhere, they are expecting, well, there's a proposal that's not been agreed to reduce the VAT on the sale of new apartments.

That's under consideration, but not yet agreed.

There's also talk about potentially extending the reduced rate of VAT on energy bills, which is due to expire at the end of October.

Now, all in all, it is expected that this will be a much more measured package.

That is generous.

Exactly.

So I don't think you're going to see the same level of shorter term cost of living measures and instead really focusing on longer term resilience.

And one thing the government have actually come out to say is they're really going to be a bit more focused on and targeted on areas that the needs are greater.

So there are talks about as well expecting an increase in core welfare payments as well.

And indeed, the government have addressed that they're looking to address child poverty in this year's budget.

One idea is a rise in the working family payment, according to some reports.