Martin Bell

Overall, we are expecting more of an economic update than a tax-focused Statement. Given the current inflationary squeeze on household income, consumer spending and business’ costs, we don’t anticipate widespread tax changes. Fuel duty cuts are likely as this is the most obvious way to help families and target support to a greater proportion of society.

While the economic picture is set to overshadow the announcement, we expect the Chancellor to set the scene for an overhaul of Britain’s corporate tax system. As he seeks to boost business investment and improve the UK’s economic growth prospects, we may see another “Tax Day” in coming weeks, which would kick-off consultations for potential changes which would be introduced at a Budget later this year.

Themes in focus are likely to be incentives for investment as the existing super deduction relief is currently due to end in 2023. This may be extended or expanded in its use, which would be well received. More than a third of Scottish companies surveyed in BDO’s most recent Rethinking the Economy research have already taken advantage of the super deduction incentive.

Today’s statement may also cover plans to improve the apprenticeship levy, to ensure it is incentivising employers to deliver the right kind of training to boost productivity. If he gets this right, this would be popular with business leaders who consistently tell us that being able to recruit enough talent with the right skills is the greatest barrier to growth

While businesses are facing headline tax increases across NIC and corporation tax, ambitious, entrepreneurial companies investing for growth will view a focus on incentives as a positive move to support long-term growth and productivity gains.

We expect further proposals to improve R&D tax relief, which will be focused on SMEs or around specific geographical investment in innovation. This could be welcomed by business as BDO’s most recent Rethinking the Economy survey showed that research and development was the most immediate business priority for 20% of Scottish businesses.

A third of businesses believe the Government should prioritise tax cuts or government subsidies for businesses based outside London, so targeted support would be well-received.