PBR predictions

Alistair Darling's first Pre-Budget Report over a year ago contained two contentious proposals – the replacement of capital gains tax taper relief with a simple 18% rate of tax and the reform of non-domicile taxation – both of which have since been watered down.

There is also no evidence that either the Chancellor or the Prime Minister have been forgiven by the public for the previous Budget debacle over the restriction of the 10p tax band.

These two issues, allied with the current instability in the world economy, lead us to believe (and compel us to hope) that the Government has learned its lesson on ill-considered tax policy.

The Pre-Budget Report should not be used by the Chancellor solely as a means to grab positive headlines because, from a business point of view, a sense of stability is needed in these very turbulent times.

Below, Baker Tilly outlines the most important issues to be dealt with by the Chancellor and what we expect he will try to achieve.

• Taxation of foreign profits
• A new Charter for taxpayers
• Relief for travel expenses
• Disincorporation relief for small companies
• Substantial donors to charity
• Consultation on HMRC powers
• SDLT & Leases – changes to rules
• Simplifying VAT partial exemption
• Associated Companies – changes to enact Extra-Statutory Concession C9
• Meeting the obligations to file returns and pay tax on time