Budget 2011: Chancellor to outline ‘from rescue to reform’ strategy
MAJOR highlights expected in today’s Budget include giving motorists some respite from spiralling fuel prices, raising the threshhold at which people start to pay income tax, cutting red tape for businesses, and the announcement of 20 enterprise zones, which aim to stimulate economic growth in struggling areas of the country.
TheBusinessDesk.com is partnering with accountancy firm Ernst & Young to bring our readers up-to-the-minute, comprehensive coverage of the Chancellor’s speech, which begins at 12.30pm.
We will send a breaking news email to readers within minutes of the conclusion of the Chancellor’s speech, including analysis from experts at Ernst & Young.
A further comprehensive email news alert, including video commentary from Ernst & Young experts and all the major Budget headlines, will also be sent to readers this afternoon as well as being available to read on our website.
TheBusinessDesk.com will also be blogging live during the Budget and video analysis will be available through our dedicated video channel, TheBusinessDesk.tv.
Looking ahead to the 12.30pm Budget, Graeme Crawford, pictured left, partner and head of tax at Ernst & Young in Birmingham, said Chancellor George Osborne faces the same challenge as many other finance ministers across Europe in trying to balance two very different aims, primarily to raise significant amounts of revenue to pay down Government debt, and creating an environment to encourage economic growth to enable the UK to thrive.
Predicting what measures Mr Osborne may make in his Budget, Mr Crawford said: “It seems unlikely that there will be further attempts to take more money from the banks, not least because the bank levy was raised earlier this year.
“The Chancellor may want to look at a Financial Activities Tax and the Financial Transactions Tax, which is currently being consulted upon by the European Commission. The fact that it is under consultation may mean that this Budget is not the time for the Chancellor to act.”
Mr Crawford believes the Chancellor may outline “an environmental roadmap” in the Budget, as the green tax agenda gathers momentum, in addition to changes to air passenger duty and the potential freeze of fuel duty.
Mr Crawford added: “Of course, this Budget is different to many others we have seen in the past, primarily because a Finance Bill has already been released in draft.
“So not only do we already know many of the things that will be announced in the Budget, we also know when they will come into force.”
Measures in the Finance Bill include a bank levy, and corporate capital gains simplifications.
“We also know some of the future changes coming up in Finance Bill 2012, such as a cut in the main Corporate Tax rate to 25% and, of course, we have the patent box and the wider Controlled Foreign Companies (CFC) reform to look forward to,” he added.
“Whilst the Corporate Tax Roadmap, published in November, provided some guidance on these issues, the Budget may well give us more of the detail.
“There are however some big question marks over whether these measures are going to be enough to deliver a real competitive environment, to prevent the leakage of UK corporates and attract new businesses.
“There may not be much room for tax cuts or incentives, but the Chancellor needs to make sure that the Budget provides the right environment for success. This is as much about the belief in the direction of tax policy, as it is about specific initiatives.”
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