 Pre-Christmas cash from the Pre-Budget Report?
13 November 2008: With the Chancellor set to make his Pre-Budget Report to Parliament on 24 November, PKF accountants & business advisers is urging him to take the chance to put spending money in employees’ pockets for the festive season.
With the Prime Minister talking up the idea of increased Government spending to kick start the economy and a give away of £15bn in tax cuts, an immediate cash injection to households is a distinct possibility according to Peter Harrup, Tax partner at PKF.
Other countries have taken a similar Keynesian approach to a recession in the past with mixed results: the US government gave out tax refunds earlier this year and, in the 1990s, the Japanese government also handed out cash to stimulate demand. Peter says, “If the Government is going to take this approach, the earlier it is done the better. But it is pointless giving money away if individuals simply add it to their savings - the cash has to be spent to benefit retailers and other businesses as it circulates through the economy.
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 | "If the Chancellor announces another increase in tax allowances in his Pre-Budget speech, employers will have enough time to put the tax cut into every employee’s pay packet before Christmas – just when people are most likely to spend it. |
“Backdating the change to the start of the tax year, as he did with the allowance changes in September, could put a useful sum into the wallets of all employees."
Increases in tax credits, Child Benefit and winter fuel payments are also expected to be announced and the total giveaways could add up to a substantial boost to consumer spending.
Peter says, “Tax cuts and cash handouts alone will not rescue the economy and they will have to be paid for eventually. But if there are some other constructive moves to help the property market, extra cash in shoppers’ pockets for Christmas could do wonders for consumer confidence.”
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For further information, or to speak to a tax expert, please contact:
Jane Murray, PR Executive, 020 7065 0135, jane.murray@uk.pkf.com
For general enquiries please contact our switchboard on 0207 065 0000
Notes to Editors:
- PKF is a leading firm of accountants and business advisers with more than 1,800 partners and staff operating in 23 offices in the UK mainland firm, a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience in the public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk.
- PKF (UK) LLP also offers financial services through its FSA authorised company, PKF Financial Planning Limited. PKF (Isle of Man) LLC is a limited liability company registered in the Isle of Man. PKF (Guernsey) Limited is incorporated in Guernsey.
- PKF (UK) LLP is a member of PKF International which is an association of legally independent firms with more than 14,650 people operating in 119 countries around the world.
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