With what may be Gordon Brown’s last budget taking place on 21st March 2007,  Kingston Smith LLP is predicting what the Chancellor of the Exchequer will focus on in his speech:

Business tax

Graham Morgan, corporate tax partner at Kingston Smith LLP comments:

“The increasing influence of EU law on our domestic tax system is likely to lead to some interesting developments. The Chancellor is also under pressure to make our company tax regime more competitive, to encourage multi-nationals to establish their headquarters here, or in some high profile cases to dissuade them from moving to a more favourable jurisdiction.

We already have the exemption for ‘substantial shareholdings’, but the UK regime is much more restrictive than that enjoyed in other EU jurisdictions, the principal distinction being the treatment of dividends from overseas subsidiaries. There may be some movement in this area and this is most likely to be in the form of a consultation.”

Personal tax

Andrew Shaw, personal tax partner, Kingston Smith LLP comments:

“It is highly likely that Gordon Brown will introduce yet more ‘green’ tax initiatives.  The taxpayer has become used to the raft of anti-avoidance provisions introduced with each budget and we anticipate that they won’t be disappointed on 21st March.  The Chancellor will also perhaps look at a simplifying the tax system, although it will of course be debatable how simple the general public will find any changes introduced!”