Member Article

Accountants give odds for Budget speech

With the Budget less than a fortnight away, accountants PricewaterhouseCoopers LLP is predicting the odds for what might appear in the Chancellor of the Exchequer’s speech.

Carol Chleboun, tax director at PricewaterhouseCoopers in Newcastle, said: “Overall, this year’s Budget should concentrate on improving the tax system, with no sweeping changes and an aim for ‘no surprises’. We know from talking to our clients that many are confused about the timing and the effect of all the changes that are in progress. The government must communicate better what is going to change and, particularly for those who are less informed about tax, it must make sure they understand what they have to do.”

PricewaterhouseCoopers have provided their predictions for some of the more likely announcements:

Increase in VAT or NIC to raise £4bn or so: 20 - 1

Even if there is a bit of a gap in the public finances, an overt tax rise seems unlikely. Reversing any of last year’s income tax changes is similarly a rank outsider.

Income tax thresholds rise in line with inflation: 1 - 2 on Â

‘Real’ increases are unlikely so fiscal drag will bring more income into the higher tax bracket.

Capital gains tax (CGT)

• holding the line on the reforms announced in the October Pre-Budget Report (PBR): 1 - 2
• some concessions to help the low paid who face significant CGT increases: 10 - 1

Income shifting recast: 3 - 1

A reasonable chance of seeing the income shifting proposals - widely regarded as impractical and burdensome - significantly recast.

The outsider: 10,000 - 1

A clear and short Budget speech with nothing in the small print to worry about.

Whether or not you’ll get these odds at the bookies, we don’t know… you could always give it a try.

This was posted in Bdaily's Members' News section by Ruth Mitchell .