What will be in the 2008 Budget?

On March 12th, Alistair Darling will deliver his first budget. With the economy slowing down, he is not left with much room for manoeuvre. Tax Revenues are less than the government hoped and the National debt is likely to soon exceed the government’s self imposed ceiling of 40% of GDP. In 2008-09 Mr Darling will need to borrow as much as £42 billion. In theory, the government should be preparing to increase taxes. However, they will want to avoid this for 2 obvious reasons

  • Politically unpopular
  • Tax rises would slow down the economy further and could lead to a recession

The Green Budget?

This budget is billed as a ‘green budget’. Whilst fundamental changes are avoided there are likely to be the prospects of green taxes such as:

  • Higher taxes on the purchase of the largest engine cars; this could be upto £2000 on the price of a new SUV

Taxes on Alcohol to Rise

After several years of below inflation rises, the government is likely to announce plans to increase taxes on alcohol. This is in response to the growing problem of binge drinking (partly due to the relaxing of license laws)

Taxes on Non Doms

For a long time people not classified as domestic residents in the UK have benefitted from a very low tax regime. The government is trying to overcome this problem; although business are uneasy at the prospects of higher taxes on entrepreneurs. There are loud calls for lower corporation tax.

Windfall Tax on Energy Companies?

The government would like a populist measure to grab a few headlines. A windfall tax on energy companies would certainly go down well with Joe Blogs on the street, but, business’s are threatening a revolt at any kind of windfall tax.

Gordon Brown’s Last Budget 2007 

Budget 2008 at the Telegraph 

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