Next Wednesday the Chancellor of the Exchequer will get to his feet in the House of Commons to deliver his second Autumn Statement.

With the Conservatives trailing in the polls, there is enormous pressure from his own backbenchers to cut taxes to revitalise their hopes of winning the next general election.

As recklessness is not an adjective that is normally associated with Jeremy Hunt and his tenure in this great office of state, the best that can be expected is that he will signal that he has room for cutting taxation next year or as some have already suggested, he may begin reductions in areas such as inheritance tax with the expectation that it will be abolished at part of his party’s manifesto.

With inflation having fallen to a two year low of 4.6% this month, the focus of the Chancellor will be on ensuring that any measures he does introduce will stimulate growth without reversing this trend.

One policy which many have been highlighting in recent weeks that can do this is making the full expensing capital allowance scheme permanent. This scheme enables businesses to deduct the entire cost of investments in IT equipment, plant, or machinery from their tax on profits within the year it is incurred and is seen as key to improving growth and productivity in the economy. At the moment, it is currently set to expire in 2026 and the UK Government is weighing options for either a one-year extension or a permanent implementation, neither of which would fuel inflation.

Whilst any such changes would be welcomed by many businesses, another key concern is that of increases in business rates which are set to rise next year by 6.7 %. A range of representative organisations, including the British Retail Consortium, the British Independent Retail Association, UK Hospitality, and the Association of Convenience Stores, have come together to warn that any increase in retailers’ business rates bills could potentially resulting in business failures, job losses, and vacant properties in high streets at a time when the economy needs to grow.

For start-ups and scale-ups needing investment and support for innovation, there are indications that there will be further detail on the future of SEIS, EIS and Venture Capital Trust schemes. Also, there is a dire need for clarity on supporting research and development (R&D) and some have lobbied to merge the two existing R&D tax relief schemes into one.

Following the recent AI summit at Bletchley Park where the Prime Minister reiterated his aim of making the UK the next ‘Silicon Valley’, it is not surprising that techUK, representing some of the leading technology firms in the UK, have urged the Chancellor to consider enhanced tax reliefs for digitalisation expenses incurred by small and medium-sized enterprises.

Its recommendation was for a 140% support rate on the first £50,000 of expenditure on productivity-enhancing digital services and whilst many would support this, it may form part of a larger review of capital allowances especially if full expensing is made permanent.

As noted, there has been considerable discussion on whether there will be a reduction in the 40% headline rate for estates worth more than £325,000, family-owned firms who may be affected by this have also called for reforms to inheritance tax in the UK.

These changes include maintaining the tax relief scheme that has allowed businesses to pass to the next generation without triggering inheritance tax since 1976 and simplifying the relief from capital gains tax on assets transferred to family members while the owner is still alive.

Therefore, as Jeremy Hunt prepares this weekend for the Autumn Statement, his main focus will be how to boost a flatlining UK economy whilst crucially keeping inflation in check. That will not be easy as it is unlikely that there will be any substantial reductions in taxation and that the main intervention is likely to be an extension of an existing policy namely that of capital allowances.

And whilst every Chancellor normally has a rabbit they pull out when making fiscal decisions, it’s difficult to see what else he will be able to do at this stage and he may instead well be keeping his powder dry for this government’s last budget next March when there be a final opportunity to deliver those tax cuts that, whilst still unlikely, could influence the result of the next General Election.