Olswang’s tax group will highlight its initial thoughts on this year’s Pre-Budget Report (PBR). We would be very interested to know your views so please feel free to post your comments.
We will also publish our analysis of the PBR which you will be able to access by clicking on the link on the right-hand side. We will publish this shortly after the PBR.
The PBR was once of lesser significance, especially when compared to the main Budget. However, in an extremely challenging environment for the global economy, the PBR 2009 is seen as critical to the stability of UK business. The forthcoming General Election adds a political dimension.
There has been much speculation regarding the possible new measures. It is anticipated that the Government will raise taxes but for who and on what is a matter of debate – increases in VAT, capital gains tax, stamp duty land tax and income tax for top earners (yet again) have all been suggested as obvious candidates.
Anti-avoidance legislation will almost certainly feature. Anti-forestalling measures are expected to prevent taking advantage of the current 40% income tax rate for higher earners prior to the rise to 50% in April 2010 by the early payment of salary, bonuses and dividends. Further anti-avoidance legislation targeting structures which have been disclosed to HM Revenue & Customs under the “disclosure regime” is also expected.
On the positive side measures might be announced to encourage investment. A reduction in the rate of corporation tax may assist. The Government is expected to announce whether it will introduce an advantageous tax regime for intellectual property, to encourage innovation and investment in the UK . A new “approved” employee share option scheme is also mooted.
We will update you with the key measures on the day of the PBR 2009. If you have any questions regarding the PBR 2009 or our coverage of it, please contact a member of the Olswang tax group.