The Pre-Budget Report is likely to include draft legislation on new HMRC powers covering penalties for late payment and interest charges on outstanding tax, according to KPMG Europe's head of tax.
Sue Bonney suggested that the proposed rules could cover one of two extremes by either containing a provision for HMRC to make allowances for businesses struggling during the ongoing financial downturn, or by pointing to a 'more draconian' approach to aid the taxman in raising more revenues from 'errant taxpayers'.
Ms Bonney also predicted that the Chancellor's PBR, expected later this month, will address the recession in other ways. For instance, the exceptional borrowing required to alleviate the current situation could be reduced in future years via an announcement of a delay in further moves towards the alignment of National Insurance contributions and income tax thresholds.
She added that Alistair Darling 'has some room for manoeuvre on extending the scope for the reduced [VAT] rate to many labour intensive supplies… [including] items as diverse as shoe and bicycle repairs, renovation of dwellings, and window cleaning'.
