IT Contractor Tax - Accountants for Contractors

21st March - Read the Key Points from Budget 2012.

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Martin Hesketh, MD of Brookson, looks at some of the issues George Osborne will need to consider ahead of the Budget on 21st March.

Despite a larger than expected rise in tax receipts in January, most experts believe that the Chancellor cannot afford to announce any significant tax cuts, but he must still find a way to create an environment in which business can flourish.

The outlook for the economy isn't all negative though, with inflation forecast to fall over the coming months, and no current signs that the economy has entered a double dip recession.

Unsurprisingly, Hesketh urges the Chancellor to stimulate growth, and provide a more beneficial business environment in which small businesses can thrive.

He hopes to see specific measures introduced to encourage entrepreneurialism in the UK.

The OTS expects announcements to be made on the future of IR35 administration some time after the Budget, and Hesketh hopes to see some real progress from the IR35 Forum in this regard.

In terms of specific tax changes, most commentators are not expecting any major announcements - although the scrapping of the additional 50% tax band has been a talking point in the media over the past few weeks.

Hesketh says that he expects only insignificant tax changes, due to the uncertain state of the economy, and the lack of options available to the Chancellor. Higher rate tax relief on pension contributions is a possible target.