'Grrrgh" is the sound usually associated with the Budget. Tomorrow, the buzz word may be GAAR. In a bid to up the Government's tax coffers, the imposition of a General Anti-Avoidance Rule (GAAR) is widely expected. The Treasury's irritation at its inability to curb tax avoidance may mean stamping down on such schemes, and their proponents. The plan is to eradicate illegitimate tax avoidance without having to take out costly legal actions on a retrospective basis. The business of legitimate avoidance of tax is known as the accountancy profession.

Government data suggests that annual VAT losses from avoidance schemes are between £2.5bn and £3bn a year. Direct tax avoidance is much greater - some estimates suggest it is more than £10bn.

Last year, the Inland Revenue said it was planning a blitz against employers who avoided up to £1bn in National Insurance contributions via exotic remuneration schemes. It is pursuing 8,000 cases, where it believes about 4,000 employers wrongly avoided payments of National Insurance between 1985 and 1998. Instead of cash, they paid bonuses to employees in the form of luxury goods, such as fine wines, oriental carpets or even rare metals such as platinum sponge.

With tax revenues not keeping up with public spending, do not expect any generosity from the Budget this year. Growth estimates are being revised upwards, though, which may mean that direct taxation increases are not necessary. Stealth taxes are likely to continue on an upward trend, and businesses could bear the brunt of this.

Tax incentives for savers are being gradually eroded. In November's pre-Budget announcement, it was confirmed that from April 6, dividend tax credit reclaims for PEP/ISA holders would be abolished. At the same time, charities will be unable to reclaim tax deducted on dividend income. Changes in trust legislation lessen the tax efficiency of trusts.

The awful scenes in Madrid last week compounded a bad week for global stock markets. Updates on the continued trade deficit in the US led to a sharp fall on Wall Street. This was echoed elsewhere. The terrorist atrocity led to further falls in a generally jittery market. Thursday saw a fall of 100 points on the FTSE, the largest one-day fall for ten months.

There are conflicting views over whether the UK stock market is overvalued, depending on when a comparison is made - to four years ago or one year ago. It looks increasingly likely, given the diversion of opinion around, that markets may be volatile for the foreseeable future.

Thursday sees supermarket chain Morrisons serving up results for the year to January 31. The company's low cost pricing should pay off, with profits likely to be £50m ahead, at around £320m. What the City really wants to know, however, is how Morrisons is digesting its recent £3bn purchase of Safeway.

As we know, certain of the Safeway stores locally are in the process of being sold off to other supermarket groups. Notice boards have been erected in the affected stores, and shoppers are currently pondering who will be supplying their grocery needs in the future.

- For investment advice contact Anthony Platts on 01642 608855.

- Ian Pluves is a director of Wise Speke. Views expressed are the author's own and are not necessarily held throughout the Brewin Dolphin Group. Wise Speke is a division of Brewin Dolphin Securities Ltd, a member of the London Stock Exhange, authorised and regulated by the Financial Services Authority. Prices, values or income may fall against investor's interests. You should therefore be aware that you may get less back than you invested. Investments may not always be suitable for all individuals. If you have any doubts, you should consut a professional advisor.

Published: ??/??/2003