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Adviser hopes and fears ahead of tomorrow’s Budget

Steve Tolley asks four advisers what they would like the Chancellor to produce in his Budget next Wednesday

Facts & Figures Financial Planning managing director Simon Webster

’The 50p rate should go. It is politically inspired, perversely it drives down revenue, it undermines entrepreneurship and we have one of the highest tax rates in the world.

’The small business rates exemption is due to end in October 2012 and I think it should be extended. It would remove a barrier to entry for the establishment of new businesses by keeping start-up costs low. Small firms will be the engine of the recovery.

“The Government should continue higher-rate relief on pension contributions. People say these people can afford to save but it is actually the hard-pressed middle who would be hit because the super-rich take their money offshore.’

Forty Two Wealth Management partner Alan Dick

’The Government should not tinker with anything to do with pension tax relief. If it is trying to encourage people to save, then constantly shifting the goal-posts will confuse people and put them off.

’Currently, people lose £1 of their personal allowance for every £2 they earn above £100,000. This means people earning between £100,000 and £114,950 pay a notional tax rate of 60 per cent. This should end because it affects far more people than the 50p rate.’

Axxis Financial Planning director Owen Wintersgill

’I would like to see the Government index-link the pension lifetime allowance. It is due to fall from £1.8m where it is now, to £1.5m in April. It used to be index-linked and it should go back to that.

“Cutting the amount people can put into pensions tax free from the current limit of £50,000 would be a reasonable way of reducing the cost of tax relief. Some very well paid people are using it to avoid tax on earnings at the end of their careers.’

Key Financial Consultants senior consultant Lee Rawding

’There is talk of a 25 per cent VAT rate for luxury items but these items will probably not be super yachts but things like mid-sized German cars. The Government should be trying to reduce taxes instead of raising them.

’Raising the personal allowance would take some lower earners out of tax, but even people on low wages should contribute something so the Government should introduce a living wage so people can afford to do that.’

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Increase the basic rate of tax to 21% and be done with it.

  2. Keep the 50% tax rate. These people can afford to live on less like everyone else and are experts at avoiding tax anyway. Increase the basic personal allowance to £10,000 which will help many more people than the 50P rate. (No they wont go abroard because they are scared of political instability and like the UK lifestyle) Scrap child benefit for top rate taxpayers. (They don’t need it) Stop paying winter fuel allowance to expats living abroard, (Their weather is better and they don’t have to pay our riduclous utility bills). Drop the NHS ‘reforms’ and let it use its purchasing power instead to drive savings.

  3. Anon – why keep the 50% rate – it doesn’t raise any revenue and shows Britain to be a high tax country. We have the 4th highest tax rate in the world. Tax is destructive and stifles growth.

    It beggers belief that you think that a higher rate tax payer doesn’t need child benefit – you think someone just above the threshold has enough money spare to give up over £1k pa just like that?

    Agree re winter fuel allowance but if you means test etc it becomes hugely expensive to adminster.

    Problem with the NHS is that it doesn’t use it’s purchasing power – as there is no responsibility or cost control you end up seeing things like £150 light bulbs.

    The key to growth in this country is to cut tax and slash public sector spending which is still completely out of control.

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