Brookson Predictions for Budget Day

After last yearís surprise announcements, the whole industry is hoping for a less impactful Budget this year. Brooksonís MD Martin Hesketh reveals what he expects and hopes some of the outcomes to be for the industry on Wednesday 12th March.

ìI think we can be sure that generally it will be a tough one,î says Martin. ìWhat with the current World economic climate, concerns over the ëcredit crunchí and a possible recession, the pressures on the Chancellor are going to be great.

ìThat all said however, I think we should be careful to avoid ending up in a recession just because so-called ëexpertsí talk us into it. The economic outlook isnít all doom and gloom. Interest rates remain at a relatively low level as do mortgage rates and unemployment is at a 30 year low.

ìControversy over capital gains tax and anger about income shifting proposals both highlighted in the pre-Budget report has led to comment that the governmentís relationship with smaller firms is worse than ever.

ìHowever, since then weíve had the announcement of the introduction of an entrepreneursí 10% capital gains tax relief and Mr Darling promised to introduce measures in ìfuture budgetsî that would boost enterprise ñ so we shall see!

ìThe environment will probably feature highly too, which means we may see something more concrete on congestion charging or road pricing. I also expect there will be an announcement of changes to the company car taxation system to encourage more environmentally-friendly behaviour.

ìI also expect there to be even further announcements about HMRC powers, penalties and compliance checks, and all the evidence points to a significant increase in tax visits over the next 12 months.

ìI think it is possible that the Chancellor may announce the introduction of the Principles-based finance product avoidance measures, which were put out for consultation in December. The general view of the tax profession is that while it may be possible to simplify some of the UKís more complicated anti-avoidance law, the Chancellor should allow much more time for analysis and debate. Letís hope the Government heed this advice.

ìOverall though, I hope for a Budget with less impact on the contractor than last year but we shall see!î