(UPDATE: if you are looking for predictions on what will be in the Emergency Budget please click on this link : Emergency Budget predictions)
Author's note 22/5/10 - The article below relates to the pre-Election Budget:
Following my earlier newsflash regarding Gordon Brown's announcement that the Budget will be held on March 24th, tax experts at Grant Thornton have offered their top 10 predictions on what we can expect come Budget day
1. More measures to reduce unemployment
Particularly in the 18-24 age group with training programmes. It remains to be seen whether this will include the government actually creating real, sustainable jobs and indeed whether the 1% National Insurance Contributions from April 2011 will impact hiring decisions in the private sector.
2. VAT to remain at 17.5%
‘We expect VAT to be left alone in this Budget,’ although GT warns the future government may well look at a raise further down the line.
3. Increased anti-avoidance measures
‘These may include stringent requirements for tax advisers to inform HMRC of the activities of their clients,’ GT says, but its stop short of predicting additional legislation.
4. Tobin tax to win votes unlikely
GT believes the government is unlikely to extend the taxes on the banking industry.
5. Rise of Green taxes
Green taxes may be seen as more palatable than for voters than further increases on alcohol or tobacco, particularly if targeted at the ‘more anonymous business taxpayer.
6. Tax credits
They are always a vote winner, but enhancements to the existing credit system are expected rather than wholesale reforms.
7. Corporation tax to remain the same
Small companies tax rate is expected to stay at 21% with the planned increase to 22% delayed until 2011/12. Further amendments to the controlled-foreign company regime could be in the offing
8. Statutory Residency Test for Non-Doms
The government has voiced its support for a full statutory residency test in the longer-term but a re-affirmation of this commitment if not the draft legislation.
9. Basic state pension changes
The Chancellor could raise the basic state pension via a pension credit scheme and further amendments could also be made to Serps.
10. HMRC powers
Expect the taxman to gain more powers. ‘We expect to see further legislation around aligning interest rates applicable to all taxes and more draconian provisions aimed at bulk repayment claims, some of which have been used to defraud HMRC,’ Grant Thornton says.
Click here to view my Budget Predictions - Part 2