Catherine McManus

That’s because the Chancellor faces a real contrast of options when it comes to supporting the wider economy towards recovery amid the COVID-19 pandemic versus the need to rebalance the books considering the support provided to date.

Catherine McManus, tax partner at Wylie & Bisset, suggests that these issues, coupled with one eye on a 2024 election, might see us with one of the most diverse Budgets we have had in a long time.

“We don’t know for certain what will be included, but there are suggestions that we are likely to see increases in CGT and possibly corporation tax rates to increase funds to the exchequer without impacting income taxes,” she said.

“On CGT, the Office of Tax Simplification’s recent recommendations are much more diverse than simple rate alignment, so it is possible that reliefs and incentives could be tweaked.”

And with many companies and businesses expecting losses, and some at unprecedented levels, Ms McManus predicts that there could be an extension of available loss reliefs with the VAT cut on tourism and hospitality likely to be extended.

Ms McManus added: “We could see enhancements of capital allowances in a bid to encourage those with available funds to spend their cash.

“This might be coupled with widening of other reliefs, such as R&D, or the creation of new incentives to support those willing and able to invest in the current market.”

On similar lines for personal tax investors, Ms McManus suggests it is possible that they could be incentivised further with wider EIS incentives or the introduction of something similar and more expansive. This would be aimed at entrepreneurship in what might otherwise be a bleak economic horizon.

Ms McManus continued: “Fears of a wealth tax seem to have eased, albeit we may hear more on the future of IHT and reliefs thereon and if anything changes on SDLT we would need to wait to see if Scotland would follow suit with LBTT amendments.

“Lastly, considering how the nation seems to have aligned itself to digitisation and digitalisation, we should expect to hear more on HMRC’s making tax digital programme.

“As always, professionals and commentators wait eagerly in anticipation of Budget day. Whatever changes the Budget brings, it will, as always, remain important to seek specialist advice on how these changes impact you.”