ECONOMIC pundits in Oxfordshire are predicting the tax changes they think Chancellor of the Exchequer Gordon Brown will pull out of his dispatch box in the Budget, writes Chris Koenig.

The Thames Valley Chamber of Commerce is calling for the Chancellor to put small firms at the heart of the Budget by introducing a simpler tax system with more incentives for entrepreneurs to invest and more measures to ease cash-flow.

Chairman of the Chamber's Economic Affairs Committee Howard Machin said: "Prosperity in the UK's small and medium sized enterprise sector is fundamental to the Chancellor's key goals of economic stability, improved productivity and job creation."

The Chamber recommends the introduction of Investment Tax Credits that would allow firms not yet showing profit to claim tax breaks against other liabilities such as PAYE and National insurance Contributions. Surveyors FPD Savills have come out against the idea of introducing a tax on developing green field sites. The purpose of such a tax would be to encourage developers to re-use land that has fallen derelict, but Miles Tuely of the firm's Oxford office says that development land taxes have been tried in the past and proved unsuccessful.

He said: "Past development land taxes have had the effect of either raising the price of all development land or discouraging owners of land which would incur the tax from selling at all."

Tax expert Julie Henshaw, of chartered accountants Neville Russell, says that it is possible that after the Budget gifts between husbands and wives will no longer be exempt from Capital Transfer Tax.

She also says that the most likely changes in Inheritance Tax concern potentially exempt transfers. These are outright gifts that are not taxed if the donor survives seven years.

She adds that anyone who has drafted their will under existing inheritance tax rules should probably revise it as soon as possible after the Budget.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.