Ahead
of the autumn statement next Wednesday, Brewin
Dolphin urges the Chancellor to focus upon growth, which includes creating
a new Business EIS, pushing up the JISA allowance and an end to tinkering with
pensions.
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| Tim Walker - Divisional Director and Head of Office, Brewin Dolphin Exeter |
“Britain
needs to be allowed to grow,” says Simon Blowey, Divisional Director of
Financial Planning. “By softening HMRC’s stance on legitimate tax planning,
allowing the pension system to settle down a bit so that savers can trust it
and creating and supporting schemes that encourage taxpayer investment in
British business, we believe the government can help it to do so.”
Tim Walker Head of
Brewin Dolphin in Exeter, said: “The majority of our wish list would be a huge
Christmas present for British families, much of which would cost the Chancellor
very little. Let’s hope he listens before next week’s statement.”
Simon
Blowey, Divisional Director Financial Planning at Brewin Dolphin, details his
ideas for growth:
Surety on pensions:
“The
welcome and revolutionary changes to pensions need time to bed in, be properly
understood and simply communicated to savers – especially those nearing
retirement who face some bewildering choices,” he said. “Let’s see some
assurances from the government that there are no further big changes on the
horizon.”
A less aggressive
attitude from HMRC:
“A general
anti-abuse rule has been established, but there is a danger that HMRC is still
treating statutory
reliefs such as EIS, VCT and BPRA planning with suspicion and this has
investors running scared,” he said. "The Treasury needs to encourage,
rather than hinder or frighten investors in such areas, and focus upon the
wider public benefits as the underlying investments encourage huge economic
generation.”
An increase in the
Inheritance Tax threshold:
“With
a nil rate band (NRB) increase of less than £100k in the last 15 years, 1 in 20
households are caught by IHT. By 2019 – now only four years away, it is predicted
to be 1 in 10 households – scarcely the rich minority the tax was meant to hit.
We would like to see the inheritance tax NRB raised to £500k per individual.”
Increasing the JISA allowance to
£15,000:
“The
current JISA allowance of £4,000 a year is far too low to encourage real saving
for university fees,” Blowey said. “Increase the JISA allowance to match the
NISA. This will encourage parents to really save for their children’s future –
when this cash will be much needed.
A
continuation of reliefs aimed at new business growth including:
A Business EIS
“A scheme similar to the
individual EIS scheme would free up nearly half a £trillion in cash sitting on
big company balance sheets and encourage investment in smaller companies. Such
a scheme would bring invaluable knowledge and experience from within big
business, as well as the cash investment,” he said. “The Centre for
Entrepreneurs wants to promote corporate venturing by creating incentives for
large firms to draw on their combined £488bn of capital for investment in SMEs.”
A rise in the VCT threshold:
“An increase in the VCT
threshold from £200k to £500k would further encourage ‘investment in growth’ in
smaller companies, so that UK Plc can re-energise economic growth.”
An extension of the SEIS scheme:
“With the successful Seed
Enterprise Investment Schemes scheduled to come to an end in 2015, we would
welcome a 5 year extension to tie-in with the next Parliament, avoiding
political uncertainty. We would like to see an increase to the individual
investor limit to £150k and company raised investment to £250k, demonstrating
The Treasury’s support for entrepreneurial start-ups.”
More business-friendly measures:
“We would like to see the
creation of a ‘Silicon Roundabout’ broad brush of business-friendly measures,
to continue supporting the organically growing UK technology and science
entrepreneurs. This would cement the UK’s position of global importance
alongside the US’s Silicon Valley, attracting high value jobs to this growing
sector.”
Other Brewin Dolphin
experts suggest the following changes.
Stephen Williams,
Divisional Director UK Equity Research suggests the following measure to ease the
property market for new entrants:
“We’d like to see the Chancellor radically
reform stamp duty. It should be paid on the sale of a house, rather than the purchase, making it
easier for first-time buyers to find sufficient money to buy a house and capped
for the over-65s, to allow them to downsize more easily - which would in turn
free up homes for struggling families.”
Ian Armstrong, oil and gas research expert wants to
see changes in the tax position in the
North Sea.
“The North Sea has been a
political football and the Chancellor has made numerous changes to appease the
Scots (as well as increase the Treasury’s coffers) so it is about time that he
sorted out an attractive medium / long term tax regime,” he said.
“The larger producing
fields, which get fewer special investment incentives, are hit with higher
corporation tax than other UK companies (30% versus 24%) in addition to
Petroleum Revenue Tax. This means they are effectively paying 81% marginal tax;
making the North Sea one of the least attractive operating areas in the world.”
“A fuel price escalator should
be re-instated to plug the gap in falling tax revenue from the North Sea if the
Brent price falls to $75.
While
Nik Stanojevic, Divisional Director UK Equity Research suggests
the following possibilities for the Utilities sector:
“Looking ahead to the
Autumn statement, investors would be keen to see any change of emphasis away
from affordability toward security of supply and enough investment in new power
generation to ensure that power cuts do not occur. National Grid, who is the
UK’s electricity system operator, predicts that the reserve margin (excluding
special supply / demand capacity payments) will fall from an already tight 4.1%
this winter to around 2% next winter. The reserve margin is a measure of the
system’s ability to deal with peak demand on the darkest coldest day – most
utilities consider above 5% as comfortable.”
“However, given the
popularity of the Miliband election promise, investors may be disappointed.”
