PwC bets chancellor will scrap duty hike in Autumn Statement

 
Ben Southwood
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THE most likely tax announcement George Osborne will make in his Autumn Statement is scrapping the planned 3p fuel duty rise, PwC estimated yesterday.

The odds of Osborne cancelling January’s rise are 7-2, the financial services giant said, ahead of extending entrepreneur’s relief to all employees, rated at 5-1.

Least likely of the possibilities are scrapping the 45p top tax rate (66-1), hiking VAT further, to 22.5 per cent (also 66-1) and a harmonisation of national insurance contributions and income tax (100-1).

Separately, tax specialists Baker Tilly criticised government tax tactics. Though raising the personal allowance has brought many low earners out of income tax, it was paid for with a falling real starting point for the higher rate – £41,450 for 2013-4, compared to £49,000 if the boundary had moved with consumer prices, it said.

The Treasury also used these fiscal drag tactics on inheritance tax, freezing the threshold at £325,000 from 2009-10 – equivalent to £364,000 in next year’s money – worth about £325m in revenue, said Baker Tilly.

Meanwhile, the Confederation of British Industry argued for a series of policy changes.

Business supports planned fiscal consolidation, the lobby group claimed, but thinks the government could be both austere and pro-growth by cutting current rather than capital spending.

The body also asked the government to limit business rates rises to two per cent next year – rather than 2.6 per cent as planned.