Chancellor Alistair Darling delivers his Budget later in the year than we've come to expect - on 22 April. This will inevitably curtail the Parliamentary debate of the Finance Bill, since it will need to be finalised in the House of Commons by the first week of July, with a view to receiving Royal Assent by the third week of July, when Parliament rises for the summer recess.

Bill Dodwell, head of tax policy at Deloitte considers what tax measures we should look out for, in a year dominated by the economy:

RECESSIONARY RELIEF

Firstly, there's little doubt that some proper measures on tax losses would be welcome. The £50,000 three year loss carry-back introduced at the Pre-Budget Report (PBR) 2008 was not well designed. Firstly, of course, it's worth less than £10,000 for most companies (although it could be worth £20,000 for unincorporated businesses). As a result, it's not big enough to make enough of a difference. Secondly, giving it only for the accounting year ending in the year 24 November 2008 - 23 November 2009 means that for many companies it will be a year too soon. The years to 31 December 2008 and 31 March 2009 (the most likely years fitting into this one-year period) are thought by many to be better than is expected in 2009-10 and 2010-11. In its place, we surely need an unlimited three year loss carry-back.

A loss carry-back may not be sufficient for some companies. Buying and selling losses has traditionally been frowned on by the Treasury. However, they have recently accepted tax losses as payment for participation in the Asset Protection Scheme, under which one participating bank contractually gave up some of its tax losses. This sort of model could help some companies, who would benefit by selling losses to the Treasury in return for a cash injection, perhaps at a discounted rate. The Treasury would also benefit by letting such companies start paying tax sooner, once profitability returns (and even the current, limited scheme is forecast to increase tax yield in two years' time). A massive loss-overhang distorts business behaviour.

The next time-limited relief that needs to be looked at is empty property relief from Business rates. The property and real estate sectors are lobbying for the relief to be reintroduced generally. However, as a minimum, the one year let-out for buildings rated at less than £15,000 offered in PBR 2008 needs to be extended for at least another two years, to protect small businesses during the expected property downturn. This one-year relief apparently cost £195 million.

The third time-limited relief that needs to be extended to be effective is the one year increase in the Stamp Duty Land Tax threshold from £125,000 to £175,000 which applies to 2 September 2009. Since the relief was introduced, volumes of house sales have plummeted; the Land Registry reported that the average monthly sales in September-December 2008 were 38,830 - down from over 95,000 in the previous year.

It is clear that the timing of the tax incentive wasn't right. We hope that the Chancellor will announce in the Budget that the £175,000 threshold will remain in place for at least another year - and preferably longer. The value of the increase will depend on which part of the country buyers are looking. The Land Registry reports that the average house price is less than £175,000 in all parts of England & Wales - apart from the South East (£190,000) and London itself (£298,000).

In a new era where lenders want sizeable deposits from buyers, the stamp duty saving of up to £1,750 is important.

The Business Payment Support Service has proved to be valuable and will need to be renewed and extended. Reports at the beginning of April noted that £1.8 billion had been advanced under the scheme, to over 100,000 taxpayers. Businesses and individuals that deferred tax payments under the scheme are unlikely to have turned the corner and further deferrals will be needed - unless other funding has become available. The scheme is likely to bring a cost in subsequent years, as not all the money advanced will end up being repaid.

PERSONAL TAXES

The Chancellor has hinted at the next area of support: help for savers. Government figures from 2006-07 suggested that over £12 billion in interest income was received by 24.5 million people with total income up to £30,000 i.e. basic rate taxpayers. For just over 1 million basic rate taxpayers (most likely pensioners), investment income was their single largest source of income. Giving up basic rate tax on savings income earned by basic rate taxpayers isn't going to solve the problems of pensioners, especially hard-hit by the drop in interest rates. However, it could provide some help and should be done for a time-limited period, whilst interest rates are abnormally low. Whilst interest rates are about 1% on average, the relief would cost about £600 million annually.

Offering a bigger cash ISA limit is likely to be one of those measures that sound better than will work in practice. Many people would simply not take advantage of the incentive and some of the benefit would undoubtedly go to higher rate taxpayers. Offering a special 'Pensioners Gilt' paying a decent minimum rate would also sound interesting but, again, would not be taken up by a sufficiently large group and would have all sorts of practical difficulties.

FOREIGN PROFITS

Moving away from recession-based measures, business has been awaiting the Foreign Profits measures. This package has been debated since 2006 and covers the way in which UK companies are taxed on profits earned overseas by their foreign subsidiaries and associates. The package contains one favourable measure - an exemption from UK tax for foreign dividends - and two tax-raising measures, being limitations on the amount of interest expense which may be used to reduce UK taxable profits.

HMRC released before Easter an update on the controversial debt cap measures, which showed that it has tried hard to deal with the many concerns of business. Our view remains that the package should go ahead, but the debt cap measures should be left out to allow for more work. We believe that there are sufficient Exchequer protections in the package, so that tax would not be put at risk and the dividend exemption would encourage UK groups to bring back funds to the UK. We expect that the Chancellor will announce the Government's decision on the package on Budget Day.

As ever, there will be a number of less significant measures, many of which have been the subject of consultation over the last 6-12 months.

TAX RISES?

Finally, the most difficult question is whether the Chancellor will announce further tax rises - not to take effect now, but to start taking effect after the next General Election. Roger Bootle, economic adviser to Deloitte, notes that further fiscal tightening will be needed,, since the UK economy has performed less well than hoped at PBR. As a result, it is thought extra fiscal tightening will be needed to repay the extra borrowing. However, this is clearly a political issue, as well as an economic issue.

The Chancellor has announced increases in income tax for those earning over £100,000 and NIC increases for everyone (although partly ameliorated for the lower paid and their employers by increasing the lower threshold).

Perhaps he might consider an increase in the VAT rate, to 18.5%, which of course he considered and rejected last autumn. This would raise over £5 billion and would cost someone on average earnings of £25,000 about £1 per week. Of course it would be necessary to compensate those on very low incomes by increasing credits and benefits.

The Chancellor could of course go back to National Insurance and increase rates by another ½%. The difficulty with this approach is that there would be no easy way to help the lower paid and it may well be disadvantageous to increase the cost of employment as the economy comes out of recession.

Yet another option could be to increase the basic rate of income tax by 1%, to 21%. This would raise over £3 billion and would cost someone earning £25,000 a further £3.50 per week - more than the VAT increase.

Putting up the top rate of tax doesn't seem to raise as much money. The new 45% rate at £150,000 is estimated by the Treasury to raise only £670 million in the first year - although the second year will raise more (the Treasury hasn't given us their figures). Could an increase to 50% be considered?

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.