Budget predictions from Pricewaterhouse Coopers

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With the Budget just over a week away (12 March), PricewaterhouseCoopers LLP is predicting the odds for what might appear in the Chancellor of the Exchequer's speech.

Leonie Kerswill, tax partner, PricewaterhouseCoopers LLP, said:

"Overall, this year's Budget should concentrate on improving the tax system, with no sweeping changes and an aim for 'no surprises'.

"We know from talking to our clients that many are confused about the timing and the effect of all the changes that are in progress. The government must communicate better what is going to change and, particularly for those who are less informed about tax, it must make sure they understand what they have to do."

PricewaterhouseCoopers predicts some of the more likely modifications:

Increase in VAT or NIC to raise £4bn or so: 20 - 1

Even if there is a bit of a gap in the public finances, an overt tax rise seems unlikely. Reversing any of last year's income tax changes is similarly a rank outsider.

Income tax thresholds rise in line with inflation: 1 - 2 on

'Real' increases are unlikely so fiscal drag will bring more income into the higher tax bracket.

Tax and the environment measures: 1 - 3 on

Something will happen; there are various possibilities:

• Formal study of 'pay as you throw' (domestic waste levy) options: 2 - 1

• Tax relief for personal purchases of carbon offsets: 10 - 1

• Lower VAT on low-energy light bulbs or other environmentally friendly products: 5 - 1

• Further increase duty on petrol/diesel, with increased duty differentials for bio-fuels: 3 - 1

• Incentives for green energy generation: 2 - 1

• Council tax/business rate reductions for carbon-neutral homes/offices: 5 - 1

• Levy on plastic bags (in line with the Irish system): 50 - 1

• It seems highly likely that we will have some green measures, it is just a question of how many and whether there are signs of a clear policy statement (or the start of a debate) on how such taxes are going to fit into the fiscal framework.

Capital gains tax (CGT)