Headline:
BUDGET 2006
Description:
Gordon Brown will take to the despatch box for the tenth time as chancellor later today to deliver his annual budget.
Amid strong speculation over his prime ministerial ambitions, many commentators say it will be Brown's last budget announcement before replacing Tony Blair as Labour party leader.
As a result, most analysts predict he is unlikely to include any unpopular increases to major taxes such as income tax and VAT meaning it could be one of Brown's least controversial statements.
The annoucement – due to begin at 1230GMT - is expected to focus heavily on improving the UK's international competitiveness through boosted innovation and productivity.
Yesterday, Brown unveiled the new International Business Advisory Council, made up of high profile business figures including Microsoft founder Bill Gates who will advise the Treasury on improving UK competitiveness.
This is likely to be followed this afternoon by further attempts to help the UK compete globally particularly with emerging economies like China and India.
Among other expected measures are improvements to the research and development tax credit system.
Focusing on SMEs in particular analysts expect Brown to make the experience of claiming R&D tax credits easier and extend the scheme to medium-sized companies.
Accountants Deloitte reported earlier this week that the chancellor will introduce teams of dedicated small business specialists to guide SMEs through the tax credit application process while the time limit for claiming relief will be cut from six to two years.
David Cobb, from Deloitte, said: "The overall message is that these measures will be a positive improvement to the R&D regime, and if implemented effectively, will be of great benefit to many SMEs."
Tax avoidance is also strongly tipped to feature in the annoucement.
Brown pledged "vigilance against tax avoidance" in the 2002 budget, a campaign which is likely to continue today.
Earlier this week, Chris Sanger, head of tax at Ernst & Young, said if Brown wants to maintain his reputation for sound economic policy "the campaign against anti-avoidance will continue apace, with businesses in the firing line."
The widening of the anti-avoidance reporting regime is likely to take in areas such as Stamp Duty and Inheritance Tax.
Other schemes under threat include tax relief allowing VAT-free import of good worth less than £18. This should please small business groups such as the Forum of Private Business which has been campaigning for a year against large UK firms' use of the loophole in the Channel Islands.
Brown is also forecast to announce "common commencement dates" for the filing of accounts and corporation tax returns, a move the Association of Certified Chartered Accountants will benefit small businesses in particular.
Business groups have called for a reduction in corporate taxes to boost UK competitiveness but most analysts believe they are likely to be disappointed.
Last weekend, the Mail on Sunday predicted Brown will abolish zero corporation tax rate on the first £10,000 of profits, something the newspaper said will hit small businesses hard.
Several environmentally friendly measures are also expected to be unveiled including a higher road tax on "gas guzzling" cars and four-by-four vehicles.
The Sunday Times said this will amount to £185 for cars that emit more than 185 grams of carbon per kilometre.
Incentives for buying fuel-efficient cars are also set to be introduced.
Stay logged onto agmtaxadvisers.co.uk for in-depth and up-to-date coverage of the budget throughout the day.
Amid strong speculation over his prime ministerial ambitions, many commentators say it will be Brown's last budget announcement before replacing Tony Blair as Labour party leader.
As a result, most analysts predict he is unlikely to include any unpopular increases to major taxes such as income tax and VAT meaning it could be one of Brown's least controversial statements.
The annoucement – due to begin at 1230GMT - is expected to focus heavily on improving the UK's international competitiveness through boosted innovation and productivity.
Yesterday, Brown unveiled the new International Business Advisory Council, made up of high profile business figures including Microsoft founder Bill Gates who will advise the Treasury on improving UK competitiveness.
This is likely to be followed this afternoon by further attempts to help the UK compete globally particularly with emerging economies like China and India.
Among other expected measures are improvements to the research and development tax credit system.
Focusing on SMEs in particular analysts expect Brown to make the experience of claiming R&D tax credits easier and extend the scheme to medium-sized companies.
Accountants Deloitte reported earlier this week that the chancellor will introduce teams of dedicated small business specialists to guide SMEs through the tax credit application process while the time limit for claiming relief will be cut from six to two years.
David Cobb, from Deloitte, said: "The overall message is that these measures will be a positive improvement to the R&D regime, and if implemented effectively, will be of great benefit to many SMEs."
Tax avoidance is also strongly tipped to feature in the annoucement.
Brown pledged "vigilance against tax avoidance" in the 2002 budget, a campaign which is likely to continue today.
Earlier this week, Chris Sanger, head of tax at Ernst & Young, said if Brown wants to maintain his reputation for sound economic policy "the campaign against anti-avoidance will continue apace, with businesses in the firing line."
The widening of the anti-avoidance reporting regime is likely to take in areas such as Stamp Duty and Inheritance Tax.
Other schemes under threat include tax relief allowing VAT-free import of good worth less than £18. This should please small business groups such as the Forum of Private Business which has been campaigning for a year against large UK firms' use of the loophole in the Channel Islands.
Brown is also forecast to announce "common commencement dates" for the filing of accounts and corporation tax returns, a move the Association of Certified Chartered Accountants will benefit small businesses in particular.
Business groups have called for a reduction in corporate taxes to boost UK competitiveness but most analysts believe they are likely to be disappointed.
Last weekend, the Mail on Sunday predicted Brown will abolish zero corporation tax rate on the first £10,000 of profits, something the newspaper said will hit small businesses hard.
Several environmentally friendly measures are also expected to be unveiled including a higher road tax on "gas guzzling" cars and four-by-four vehicles.
The Sunday Times said this will amount to £185 for cars that emit more than 185 grams of carbon per kilometre.
Incentives for buying fuel-efficient cars are also set to be introduced.
Stay logged onto agmtaxadvisers.co.uk for in-depth and up-to-date coverage of the budget throughout the day.
Date:
22.03.2006
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