Chancellor, George Osborne will deliver the first Budget from the new Conservative majority government on Wednesday, with around £12 billion worth of spending cuts anticipated.
The focus of the Budget will no doubt be the economy, setting out the parameters of the country’s spending and welfare cuts.
Mr Osborne stated the “unusual step” of announcing a second Budget of the year was made to ensure the Government could “turn the promises made [in its electoral mandate] into a reality”.
The biggest fiscal promise we’ve seen since the election is the Chancellor’s pledge to run a budget surplus in “normal times”, which it’s thought will mean the end of the Conservatives’ five-year term in office.
This summer Budget has been deemed an ‘emergency’ one given that it is being delivered so soon after the new Parliamentary session on May 27.
The key steps within the Chancellor’s new long-term economic plan are likely to include:
The reduction of the deficit to safeguard the economy and stabilise mortgage rates
Cuts to income tax and fuel duty
The creation of more jobs by backing enterprise with improved infrastructure and reduced taxes
Caps on welfare and controls on immigration
Improvements to schools and increased opportunities for the ‘next generation’ to succeed
Bill Dodwell, head of Deloitte’s tax policy group, believes changes will be needed to the ‘patent box’ regime to make it compatible with the new approach agreed by the Forum on Harmful Tax Practices.
“We doubt that the detailed work at the G20/OECD level will have been completed in time for a Budget announcement – although the new regime will need to be implemented quickly as the existing regime closes to new entrants in 2016,” said Dodwell.
“We also expect the Chancellor to signal likely UK intentions in relation to the G20/OECD Base Erosion and Profit Shifting project, due to present final actions in October 2015.
“The Government has proposed to ‘raise £5 billion from continuing to tackle tax evasion and aggressive tax avoidance and tax planning’. It remains to be seen how this figure will be raised.”
For a full rundown of what’s likely to be included in the Summer Budget 2015 take a moment to read our in-depth guide and monitor our Twitter feed for updates throughout Wednesday.
Image: Derek Key