Brown targets air passengers to bear PBR burden
Brown's final act doubles air passenger duty, cracks down on composite companies and closes tax loopholes
Airline passengers bore the brunt of what is expected to be Gordon Brown’s
last pre-Budget report.
A measure doubling the air passenger duty rate will raise £1bn a year from
next year, Treasury documents said.
The pre-Budget report as a whole will raise tax by £2bn a year from next
year, with the rest coming from a crackdown on composite companies and closing
tax loopholes.
The chancellor also admitted that carousel fraud was on the rise, costing the UK
£2bn to £3bn a year.
Corporation tax will not, however, hit £50bn in 2006-7, as predicted last
year. Predictions for 2006-7 and 2007-8 were £48bn and £53.8bn respectively.
Sue Bonney, KPMG’s UK head of tax, said: ‘There was scant evidence of a
strategic shift and no “big picture” presented. Business’s tax ‘bugbears’ are
the complexity of the system, general unpredictability which hinders business
planning and, increasingly, the overall rates imposed. None of these were really
addressed.’