Last updated 05:12, Friday, 07 November 2008

The traditional British firework night is a feature of this time of year. We are taught to remember, remember the fifth of November – but how many of us do remember the origins of the tradition?

Remember... Guy Fawkes’s protest? Today we accept Government policy more peaceably – even the Chancellor’s pre-Budget report

Guy Fawkes was a plotter who planned to blow up Parliament in 1605 – although it was really the King he was angry with.

Nevertheless, he was evidently quite happy to get rid of all of the politicians of the day.

These days we are less extreme in our actions when it comes to politicians but they are even more influential in our daily lives than they were 400 years ago.

We will shortly be looking forward to the annual pre-Budget report (PBR) which has overtaken the Budget itself as the principal date for major announcements on tax and spending.

What can we expect and is there anything that we should be doing in advance – or not doing just in case the position improves?

Last year saw limited reductions in Inheritance Tax and I think it is unlikely there will be any further changes there.

Last year also saw major changes to Capital Gains Tax with many of the complications swept away in the PBR – only for some new ones to be reintroduced after an outcry in the form of a tax relief for some business related disposals.

The new Entrepreneurs Relief is excessively complicated in my view and restrictive in its scope. I am looking for some relaxation but I am not optimistic.

I am more hopeful with the various tax breaks which are specifically designed to encourage investment in new business ventures.

The credit crunch and all that has gone with it has made venture capital very hard to find.

Yet with Britain in recession, tax breaks aimed specifically in this area to create new jobs might be on the cards – if the Government does have any tax to give away then it might be there.

Already, it is possibly to claim back Capital Gains Tax at last year’s 40 per cent rate for some forms of investment; possibly this could be made more attractive with some of the restrictions removed.

Changes to the main rates of Income Tax, National Insurance and VAT are, I am afraid, very unlikely.

The recent furore over the abolition of the 10p tax rate shows just how sensitive changes are here if you get it wrong.

Even small reductions here would also be very expensive and so difficult for a Government with tight finances to afford.

Green issues are still on the agenda, however, and I would not be surprised to see some further concessions on VAT for products deemed to be carbon-friendly.

With inflation at 5.2 per cent on official figures (and more according to some observers), one would not normally expect significant rises in tobacco and alcohol duties – or indeed on petrol.

Nevertheless, inflation is expected to fall significantly next year and petrol prices are already well down from their peak. I predict that there will be rises although possibly they will be delayed until the spring.

Finally, Stamp Duty (or more properly Stamp Duty Land Tax) is an issue that will not go away. The temporary relaxations announced in September will cause problems if they come to an end.

Expect the relaxations to be made permanent and possibly the limits increased.

The Chancellor will, I think, try to make the PBR an economic steady-as-you-go event with one big announcement to try to take the headlines. Possibly this could be a major cut in Stamp Duty.

For advice on any of the concerns covered in this article, please call freephone 0800 195 2161 or email moneymatters@armstrongwatson.co.uk