Analysis: Pre-Budget report preview
While fuel duty remains the most talked about issue for the chancellor to deal with in his pre-Budget report, other areas are beginning to emerge as likely contenders.
While fuel duty remains the most talked about issue for the chancellor to deal with in his pre-Budget report, other areas are beginning to emerge as likely contenders.
There are plenty of issues Gordon Brown could choose to address starting with some of the least conspicuous, such as the treatments of intangible assets and goodwill, along with the capital gains made on the sale of shares in one company owned by another.
With the rise of dot.coms, intangible assets have become something of a hot issue and the Inland Revenue has had a paper out for some time discussing the subject.
The proposal would allow the depreciation on intellectual property to be tax deductible. However, a radical proposal from the Revenue has been to include goodwill in the same treatment. A measure which experts believe would ‘change the face of all thinking about tax when it comes to acquisition and structuring of purchases’.
Brown might also consider offering tax relief on the gains made by one company when it sells shares it holds in another. The proposal would allow the company to defer tax payments.
Another area the chancellor could talk about is tightening up the recently enacted Limited Liability Partnership Act. Concerns appear to be growing the act could allow tax avoidance.
Self-assessment might also be up for discussion. There has been talk of changes to the way inquiries are undertaken on self-assessment. Accountants have been surveyed on the subject and the results are expected around the time of the report.
And with economists estimating he is on track for a £16bn Budget surplus, commentators believe we could see some tax cuts, especially with a general election looming next year.