Budget: Beware the damp squib
Hoping for a sea change in economic policy in the forthcoming Budget? Don't hold your breath, say the experts.
Professional advisers are preparing themselves for a damp squib of a Budget, as the date for one of the most political chancellor's speeches in recent years rapidly approaches, reports our sister site FinanceWeek.co.uk.
Regardless of whether Labour stay in power or if there is a power shift after the general election, widely expected to take place on 6 May, the money’s on an emergency Budget being called in June/July by the incoming (or incumbent) government. It’s this ‘real’ Budget that advisers believe will have more in the way of teeth – and more importantly for business - tax rises.
PwC said this week that additional tax hikes of £20bn, over and above current plans, would be essential by 2013/14 to close the fiscal gap. Meanwhile George Bull, national head of tax at Baker Tilly, said in a briefing that an increase in VAT to 20% would raise £12bn a year.
Francesca Lagerberg, head of tax at Grant Thornton, said 24 March would be a ‘don’t scare the horses’ Budget, where chancellor Alistair Darling would be at pains to portray himself as a careful custodian of the UK economy hell-bent on making sure that the small shoots of recovery were given a chance to grow.
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