Conservative Diary

« Further evidence of UKIP's threat to the Conservatives | Main | Party Members expect Tory MPs to "normally support" the Government in Commons votes and call on regular rebels to be disciplined »

First Budget whispers suggest a merging of income tax and NI, tax breaks for "business angels" and a hike in airport tax...

By Jonathan Isaby

George Osborne Budget Day The broadcast and print media still remain understandably dominated by the aftermath of the Japanese earthquake.

But whilst several departments remain focused on those matters overseas, both in Japan and of course the continuing unrest in parts of the Middle East and North Africa, much of the Whitehall machine is working overtime to prepare for George Osborne's Budget next Wednesday.

And today has seen a flurry of speculation about what may or may not be included in the Chancellor's statement, to be delivered next Wednesday at 12.30pm.

Here are the three main stories floating around today:

1. The potential merging of income tax and national insurance
"Income tax and national insurance could be merged as part of a drive to simplify the tax system by the Coalition Government. The move is expected to be signalled by George Osborne in his Budget next Wednesday. Although such a huge change would take years to implement, the Chancellor is determined to be seen as a reformer and not just as the axeman who cleared the budget deficit he inherited from Labour. The idea has been under discussion for years, but politicians have shied away from implementing it... One minister said yesterday: "It would be a radical reform and lasting legacy for the Government. We don't want to be remembered for cuts, cuts and more cuts." - from today's Independent

2. More tax breaks for "business angels"
"Tax breaks for business angels investing in Britain’s small companies are set to be extended in George Osborne’s “Budget for growth” next week as part of the chancellor’s efforts to encourage the nation’s entrepreneurs. The current Enterprise Investment Scheme offers individual tax breaks, amounting to 20 per cent relief, for those investing up to £500,000 in companies which must have less than £7m in gross assets and fewer than 50 employees.  But the government is planning to shake up the scheme as it seeks to deliver its “most pro-growth budget for a generation”, in part by promoting an “enterprise culture” in the UK... Changes to the scheme are likely to include widening the scope of the EIS to include bigger companies as well as increasing the amount of investment eligible for relief from its £500,000 level. The chancellor may also increase the level of tax relief." - from today's FT (£)

3. Airport tax to be increased
"Holiday-makers face another rise in flight taxes in next week's Budget, the Evening Standard has learned. The Government is also finalising plans to impose new taxation on private jets as ministers scramble to raise money to plug the country's deficit. The tax raid could add hundreds of pounds to the cost of travelling abroad for families and businesses. It will be the fourth rise in Air Passenger Duty in three years." - from this afternoon's Evening Standard

Whether they are well-informed leaks or mere speculation remains to be seen - there will doubtless be much more speculation over the coming days...

PS My attention is drawn to a fourth piece from the Telegraph's Ben Brogan, who anticipates a marker on the future of the 50p tax band as a way of putting an end to what he calls "the growing exodus of entrepreneurs"


You must be logged in using Intense Debate, Wordpress, Twitter or Facebook to comment.