Fidelity director of tax planning Paul Kennedy says the coalition Government is taking the most sensible approach to tax he has seen after working in the industry for nearly 30 years.
He says the combination of Conservative and Liberal Democrat thinking is leading to a series of sensible, middle-ground policies.
He says: “What they appear to be saying is that we are in a position where we have a deficit to pay off but how we go about it they do not much mind as long as it is reasonably fair.”
Kennedy says the increase in capital gains tax to 28 per cent for higher-rate taxpayers in the June Budget was a sensible measure. He welcomes Chancellor George Osborne’s pledge that this rate will be kept for the length of this Parliament.
The Government has outlined a number of consultations affecting pensions, including reform of the age 75 rule and cutting the annual allowance instead of Labour’s proposed complex restrictions to higher-rate pension tax relief. Kennedy says the Government has been consulting sensibly with the industry and consumers about the best way to reform higher-rate pension tax relief.
He adds: “They are also publishing the law before it hits the statute books, all this is open and refreshing.”
Cicero Consulting director and chief corporate counsel Iain Anderson says the coalition is continuing the direction of travel laid out in the Conservatives’ Howe report in July 2008. The Tories promised that any future Conservative Government would end the “rabbits from the hat” approach to tax announcements seen under Labour.
Instead, the Tories pledged to propose any major tax changes at least four months before the annual Budget.
Anderson says: “This is extremely welcome as it allows the industry to properly input and prepare for any changes.”