Experts are predicting that Gordon Brown’s final Budget next week will be his most political ever as he attempts to win over dissident Labour backbenchers and establish his leadership manifesto.

The chancellor is expected to amend VAT on gas-guzzling cars and inefficient consumer appliances by introducing a new 25% band on these items, and reduce VAT payments on ‘green’ vehicles and electric goods.

Advisers also believe that Brown will add higher bands of stamp duty land tax on expensive homes and tighten anti-avoidance rules for IHT.

Nigel May, tax principal at MacIntyre Hudson, said major changes to tax rules were unlikely as recent tax receipts had removed the need to plug budget deficits with large revenue raising taxes. This would free Brown up to lay out his leadership agenda.

‘This will have to be Gordon Brown’s most political exercise as he tries to set out his leadership manifesto to the Labour Party. There is certainly likely to be more green posturing and tightening the IHT net,’ May said.

John Whiting, tax partner at PricewaterhouseCoopers, said anti-avoidance would feature strongly in the Budget announcement. The Treasury has already released the details of eight avoidance schemes that will be shut down in the Budget speech.

‘It is strange to announce legislation closing eight schemes when you have a Budget in a few weeks time, but this probably shows how important anti-avoidance is to the Treasury,’ Whiting said.

On the corporate tax front little if any change is expected. Deloitte corporate tax partner Bill Dodwell said the most that could be expected was the announcement of a consultation paper on the taxation of UK companies with foreign subsidiaries.

‘In the pre-Budget report Brown said he would launch the paper in the Budget. We expect this to deal with controlled foreign companies and double taxation,’ Dodwell said.