PricewaterhouseCoopers (PwC) predicts the odds are six to one for a 2.5% reduction in VAT to be announced at next Monday's PBR, but believes a modest cut of about 1% is more likely.

John Whiting, PwC tax partner, also forecasts the odds are one to two for a commitment to introduce some form of tax exemption on overseas profits for UK-based multinationals when already taxed abroad to keep its faith in the prospect of an improved UK system.

He predicts the same odds for more adjustments for taxpayers who had lost out in the 10p income tax changes. There were still taxpayers who had not been fully compensated for the removal of the 10p income tax band from April 2008.

He said the odds were even for a possible cancellation of the 1% increase in companies' rate of corporation tax - planned to rise to 22% from and cancelling the tax rise would be a welcome signal to smaller businesses.

Further reading:

PBR tipped to have far reaching measures

VAT rise ruled out as part of pre-Budget report