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.