Budget 2012: what will be in Osborne’s red box?

The chancellor appears likely to close a loophole by which people can avoid paying stamp duty on properties by putting expensive properties in off-shore firms. Stephen Herring, a senior tax partner at BDO, said the change is “as close to a dead cert as you can get”.

The Conservative Osborne is unlikely to introduce a new mansion tax, an idea floated by his Lib Dem colleagues. Yet council tax bands are due to be updated, and extra bands for multi-million pound properties could be added. This would enable higher taxes to be charged on very high value homes.

Deputy prime minister Nick Clegg floated the idea of a minimum tax on high income earners over the weekend. The plan was widely criticised by leading accountants as unnecessary and is unlikely to ever see the light of day. Yet Herring expects the Budget to include anti avoidance measures, which Clegg could claim as a political victory.

Osborne is believed to favour cutting corporation tax to 20 per cent, although this may only be voiced as an aspiration. The rate is due to come down to 24 per cent on 1 April 2013. Herring suspects that the chancellor may reduce this to 23 per cent as a boon for businesses.

Relief on pensions contributions for top rate earners could be cut, although not by as much as Labour is demanding.

“No chancellor will want to stand up and not have a couple of goodies in his bags,” Herring told us yesterday. Yet any nice surprises are unlikely to involve a reduction in the top rate of income tax.