How Osborne could boost the coffers

THE Chancellor is under pressure to stimulate growth at a time when the Treasury’s coffers are under massive strain. Here are the measures he might take on business taxes: GET TOUGH ON TAX AVOIDERS ÷ He is likely to say more on the proposed General Anti-Abuse Rule. Stephen Herring, of accountant BDO, says: ‘Osborne should provide more guidance on what is acceptable tax planning and what is unacceptable tax abuse. But he won’t.’ We are also likely to hear some comments on international companies such as Starbucks or Google that have run into tax controversies. KICK-START INVESTMENT ÷ In the Autumn Statement Osborne brought in a temporary two-year increase in the annual investment allowance from £25,000 to £250,000. He may opt to extend this indefinitely. SIMPLER INCOME TAX FOR THE VERY SMALLEST FIRMS ÷ Like most Chancellors before him, Osborne says he wants to strip complexity out of the system. Removing tangles for small firms would be a step on the right road. MEASURES ON EMPLOYEE SHARE SCHEMES ÷ Expect to hear more about plans to offer staff shares in their company in return for surrendering some of their workplace rights. TAX ADVANTAGES FOR INVESTORS IN EARLY STAGE BUSINESSES ÷ There may be an extension of capital gains tax deferral relief on Seed Enterprise Investment schemes. REDUCED EMPLOYMENT TAXES ÷ Holidays from employers’ National Insurance Contributions, or reductions in the rate, may encourage firms to hire staff. In a survey for BDO, nearly 40pc of business leaders called for a reduction in employers’ NIC 13.8pc to 12pc to be the Chancellor’s number one priority. But Osborne will be reluctant to cut this ‘jobs tax’ as it raises more than £40bn he can ill afford to forgo at a time when corporation tax yields are reducing. THE ‘PATENT BOX’ ÷ This targeted tax relief gives a lower tax rate on intellectual property in order to encourage innovation and high-value manufacturing. BUSINESS RATES ÷ A major burden on firms, the Chancellor could lighten the load by freezing them.