Election steers PBR predictions
Next week's pre-Budget report will avoid controversy because the government has one eye on the upcoming election, roundly expected for May next year.
Link: CGT rise predicted in PBR
Ernst & Young claimed that, while Gordon Brown faced a budget shortfall of between £3bn and £6bn, he would be loath to raise taxes so close to a general election.
Aidan O’Carroll, head of tax at E&Y, said the chancellor would use the PBR to launch a number of consultations.
‘The PBR will be all about the long-term,’ O’Carroll said.
But Brown has already hinted that he will tackle small business red tape and bureaucracy in the PBR. Both were also mentioned in Tuesday’s Queen’s Speech, which promised to ‘reform company law to reflect small firms’ needs’.
Mike Warburton, senior tax partner at Grant Thornton, said he expected Brown to unveil a ‘raft of new anti-avoidance measures’ and the results of consultation on the controversial pre-owned assets regime.
Warburton said that now the Inland Revenue’s Avoidance Intelligence Unit was up and running, its head, Ray McCann, would go to Brown with a ‘package of legislative announcements’ to close certain loopholes.
John Whiting, tax partner at PricewaterhouseCoopers, agreed that the PBR would have little in the way of major announcements, but ‘no doubt tax experts will not be short of reading’.