Partner Article

A Budget for votes or a promise of things to come?

Without a doubt, the Chancellor will use his 19th March Budget to set the tax scene for the 7th May 2015 general election. There will be something for hard-pressed working families and measures to boost business.

Steps to aid economic recovery and to foster fairness and transparency in the tax system. Can we expect grand tax gestures, small-scale juggling or a combination of both? And will these take immediate effect or be promised for 2015/16?

Notwithstanding suggestions that an immediate cut of 1% in the basic rate of income tax (at a cost of around £4bn) would boost the economy and be particularly welcomed by low-income groups, we think that grand gestures in this area are likely to be limited to a promise of a further £500 increase in the personal allowance from 2015/16.

People will also be keeping a close eye on stamp duty, hoping for reform to reduce the property market distortion caused the current rate structure.

With corporation tax rates set for the time being, any fresh boost for business is likely to relate to capital expenditure and job creation.

On tax avoidance, we expect more consultation ahead of the next OECD report.

And on VAT the Chancellor could make much more use of the 5% rate band. But will he?

To find out, we’ll have to wait until next week.

This was posted in Bdaily's Members' News section by George Bull .