Budget 2010: What to expect Go compare with our comparison table

Budget 2010: What to expect

23 March 2010 / by Rebecca Sargent

The last Budget before the general election is unlikely to make waves, industry experts are claiming.

Speaking to the BBC earlier this month, Darling said that the Budget would be 'sensible' and 'reflect the times in which we live', and reaffirmed his commitment to halve the UK's budget deficit within four years.

Increases in national insurance announced in the Pre-Budget report last year may mean that the Chancellor does not need to increase taxes to meet this target, chief secretary to the Treasury, Liam Byrne told the BBC.

However, many believe that taxes must increase; commenting, Gavin Oldham, chief executive of The Share Centre said: "Of course the laws binding the Government to return the public sector deficit to some sort of normality will be trotted out again, but there will be a huge void between what will happen and what should happen.

"So there will be visible giveaways which don’t cost very much, heavier taxes on the 1.7 per cent of the population who already provide a quarter of the tax income, and optimistic noises about the few green shoots of recovery," he said.

And there may also be increases in Capital Gains Tax, Mr Oldham adds: "The Chancellor may risk investors' and entrepreneurs' patience by pushing up CGT."

Other ways the Chancellor is expected to claw back the deficit include rumours of a crack-down on tax-evasion as the Financial Times has reported that Darling is expected to increase the penalty to 200 per cent.

However, the difference between what should and what will happen remains under scrutiny. According to Mr Oldham, the Chancellor needs to take serious measures to really make a difference.

"VAT should rise in three steps to 25 per cent, raising £30billion," he said, adding: "Most importantly, there should be real incentives to create a nation of wealth generators, to get the economy moving and broaden its tax base to provide stability.

"Indirect taxation increases are one way of spreading the load, but with nearly half of public expenditure either borrowed or raised from that 1.7 per cent of the population, the need for action is urgent. Just don't hold your breath."

© Fair Investment Company Ltd
 

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