Contact: Jamie Harley
Deloitte
Public Relations
+44 20 7303 5037

Contact: Celine Gordine-Wright
Deloitte
Public Relations
+44 20 7007 6384

Bill Dodwell, head of tax policy at Deloitte, said: “After the Chancellor's spectacular first Pre-Budget Report (PBR), last October, the Chancellor will find considerable public focus on his second PBR, to be delivered on 24 November.  Undoubtedly, Alistair Darling will focus on the current challenging economic outlook, including his growth forecasts for the UK and tax, spending and borrowing figures for the current and next financial year. 

"There has been considerable speculation about tax cuts, to aid the UK economy.  We doubt that the Chancellor will propose any form of general tax cut, such as a cut in the VAT rate, since that sort of measure is very costly and does not target those who most need help: lower earners, those on benefits and smaller businesses.  Instead, we may see targeted measures helping these groups.

“The PBR is the time when the personal allowances, benefits rates and national insurance rates for the next tax year are announced.  These are based on the September Retail Prices Index (RPI), which peaked at 5.2%.  Whilst the Chancellor could choose to override the RPI, setting lower rates, we think he will want to help households, which have borne inflation at this level in 2008.

“Additionally, we expect the Chancellor to set out his long-term plans for dealing with the abolition of the 10% tax rate; the increase in personal allowances in September was stated to be for this year alone.

“Elsewhere, business will be looking out for an announcement on whether the reform of the taxation of Foreign Profits will go ahead in 2009.  If the Chancellor does proceed, it is expected that we'll see a new tax exemption for dividends from overseas companies paid to UK companies, together with some new limits on the deductibility of interest.  It is also possible that there will be an update on the 'disguised interest' proposals, consulted on over the summer.

“Smaller businesses affected by the current challenging market conditions may also be offered a lifeline of sorts by the Chancellor.  This could include a deferral of tax payments, or the introduction of a three year loss carry-back, allowing businesses with current tax losses to claim a repayment of tax paid in previous years.”

To speak to Bill Dodwell or another of Deloitte’s tax experts ahead of the Pre-Budget Report, please call Celine Gordine-Wright on 020 7007 6384.

Ends

Notes to editors:

Deloitte spokespeople:
The following experts from Deloitte are available now and on the day of the Pre-Budget Report for comment. From 12pm on Monday 24 November, please call the Deloitte PBR Press Hotline on 020 7007 3333, where you will be directly connected to one of our spokespeople:

Bill Dodwell	Business taxation and general topics
David Norton	Corporate tax
Daniel Lyons	Indirect tax and green taxes
Patricia Mock	Personal taxes
Stuart Davies	Investment and pensions
Tony Cohen	Entrepreneurs, Capital Gains Tax
Matt Ellis	Employer taxes
Phil Nicklin	Property taxation and REITs
Michael Quinlan	Stamp taxes
Eliza Dungworth	Funds
Julian Small	Oil & gas

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP, which is among the country's leading professional services firms.  Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, whose member firms are legally separate and independent entities.  Please see www.deloitte.co.uk\about for a detailed description of the legal structure of DTT and its member firms.  The information contained in this press release is correct at the time of going to press.  For more information, please visit www.deloitte.co.uk.