With an election expected in May, Chancellor Gordon Brown is expected to give an upbeat speech that he hopes will help Labour secure a third term.
Although he may outline new anti-tax avoidance measures, tax accountants in the Island do not expect Jersey to be a significant target.
John Shenton, tax partner at accountancy firm Ernst & Young, said: ‘To show that he is taxing everybody, I expect that the Chancellor will make a bland statement about anti-avoidance, which will affect the UK as well as Jersey.
‘We may see some clarification on the rules governing pre-owned assets, which relate to people who have put property into a trust but maintain some interest.
The current rules do not work, so we may see some more guidelines.
‘Although the £18 VAT exemption has been in the press recently, I don’t expect the Chancellor to touch that.
I suspect that it will be a “”giveaway”” budget for the election, but overall I think that Wednesday will be a quiet day.
Jane Stubbs of PriceWaterhouseCoopers said that she would be looking to see if the Chancellor would change the status of non-domicile residents in the UK.
‘The pre-Budget report last autumn hinted at some changes to the non-domicile rules with a reference to “”continuing to examine responses to the background paper””,’ she said.
‘Movement on this is unlikely before an election, but you never know – and there could be very severe repercussions for the finance industry depending on what they do.
‘We could also see a revision to the United Kingdom’s rules on company residence, which are looking rather out of date in the modern world, and again this could have implications for Jersey’s finance industry.
‘But I suspect that any changes will be tinkering rather than punitive.
KPMG’s John Riva said that he doubted whether Mr Brown would change the non-domicile rules.
Nor did he think that the Budget would have huge implications for Jersey.
‘We may see the Chancellor shut down some anti-avoidance schemes, but they mostly originate in the UK, with Jersey only providing the services,’ he said.
‘We don’t dream up these schemes; nor are we the beneficiaries.
So the Island is not the primary target.
In fact, although the crackdown on anti-avoidance schemes that originate in the UK may cause us some collateral damage, it is, in a perverse way, assisting us by taking the focus away from offshore financial centres.
