Commentators and experts are busy looking at the likely changes to be made in the second Budget in only a matter of months.
It will be the first Conservative majority government Budget for 19 years.
Salary sacrifice could be for the axe, some have predicted, while suggestions of the 45% top rate of tax being reduced to 40% were dismissed by the Chancellor at the weekend.
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Thomas Miller Investment highlighted a number of key points it expects to emerge from the announcement:
• Cuts in pension tax relief for additional rate tax payers (those earning over £150,000) could be used to fund further Inheritance Tax breaks.
• Targeting of tax avoidance and aggressive tax planning by the rich as well as reviewing the taxes that non-doms pay.
• Capital Gains tax is in the spotlight and may increase.
• Personal tax rates may be tinkered with, though Mr Osborne made manifesto promises not to make major changes to income tax, National Insurance and VAT.
Frazer Wilson, senior consultant at Thomas Miller Investment, said: “Our prediction is that it’s not going to be pretty for many.
“With Greece in the headlights at the moment, this has deflected the heat away from what our government has in store but the pressure is certainly on to keep the Chancellors pledge of moving from our significant debt position to “run a budget surplus” over the next few years. This promise will not be easy, given some of the other goodies that were dangled in front of the electorate pre-Election, but our own austerity measures are about to bite.
“The promises of the pre-Election manifesto are still fresh in most people’s minds, but with a majority government (albeit a small one) we should all expect a few more shocks on Wednesday.”
Gavin Moffatt, associate at City Noble, independent pension advisers, said: “The Chancellor is very likely to tinker with high earners’ pensions, but could salary sacrifice be next for the chop?
“While salary sacrifice is always touted as a potential target in any Budget, this time the Chancellor might actually do something about it. If he decides to progress further, in our view any workable attempt would mean not making employer pension contributions in general subject to NI, which would be extremely contentious, but to attack the act of sacrifice itself.
“This would mean setting down a definition in law and treating amounts sacrificed as earned income. Needless to say it would be hideously complicated, and with everything else to contend with let’s hope salary sacrifice survives another year.”
Colin Lawson, managing partner at Equilibrium, called for the abolition of the life time allowance.
He said: “Its original purpose was to restrict higher rate tax relief, but it’s now becoming a success tax which penalises good investment performance, not just the super-rich. It’s fair to restrict what you pay in but not how much you can have in your fund. Life time allowance tax is in fact stopping people saving well before retirement age, leaving them vulnerable to the effects of inflation.”