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IFA manifestos- Colin Parkin

In the first of a series of articles, advisers suggest what the three main parties should have included in last week’s manifestos.

We currently have a massive debt, which has got to be repaid. Many, many years ago when I first started in business I learnt that if you earn £100 and spend £95, you’ll always have money, but if you spend £105, you’ll go broke. So the first thing we’ve got to do for the Great British economy is to stop it going broke.

To do that, we’ve got to have a debt repayment plan, which is going to be painful. Nobody minds paying a fair share of what we do, but with all of these stealth taxes and the indirect taxes and the hidden taxes about 80p of everything you earn goes into some kind of tax, and it’s not what the Great British public want.

So, most of our clients that we speak to have said why can’t they just put 3p on income tax and just get rid of all the rest. So, to have a nice straightforward simple system, that is what I would do. I’d put 3p on income tax, I’d get rid of VAT, I’d half the tax on petrol, and I’d half the tax on indirect taxes that everybody hates.

Now, it terms of inheritance tax, I would have the threshold linked directly with the housing market index. If a house went up 10 per cent, the inheritance tax threshold would go up by 10 per cent. That would just keep it in line and nobody would mind paying their fair slice as we go through the system.

Introducing a higher rate tax discourages people from working so I would not go higher than the 40 per cent level of taxation. But, to get people moving there needs to be an incentive for people to strive to earn more, therefore I would taper in the increase to the higher rate of income tax between around £37,000 and £50,000.

Because we are in a baby boom era, the number of people contributing to the system is getting smaller and smaller and smaller, so, we can’t support an old age system that brings in the basic state pension at 65. They already have plans to move that age up and really that age needs to go to 75, before the state old age pension kicks in. I know that won’t be popular to anybody particularly, but we just don’t have the resources.

In terms of the NHS, I would bring in a similar system to what America has. The NHS is just a lumbering giant full of waste and we just can’t afford to pay for it. It needs a radical overhaul.

Stamp duty is one of the most hated taxes that any government has introduced. There has to be some kind of stamp duty but I would move the level for all buyers to £250k, rather than just first time buyers, because that doesn’t allow families to move from a starter home to a 3 bedroom semi (or whatever) without paying a huge amount of stamp duty. They are just trying to nail the normal working person in the early part of their lives when they can’t afford it.

Ample Financial Services director Colin Parkin

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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Indirect taxation is often seen as fairer because it gives people a choice.

    An increase in income tax would hit the poorest hardest in real terms and be amajor disinsentive to remain in work or seek to return to the workforce.

    Higher rate tax does not discourage people from working – it may discourage earning more, but definitely not from working full stop!

    Raising the state retirement age is well under way and there are already incentives for delaying taking basic state pension. No political party in their right mind would lead with rasing state pension age to 75 straight away for obvious reasons. There would need to be a change to employment law as at the moment it’s out sync.

    Isn’t Obama trying to reform healthcare in the US because it doesn’t help the poorest in the same way as the rich? The NHS is a great system and needs to be maintained. Many countries around the world envy it.

  2. Why go halfway on pensions? Perhaps we should consider removing them for anyone who has a taxable income of over £75k? If anyone can justify why they need a State Benefit on top of that figure (as opposed to why they should have it i.e. I’ve paid NI all my life) I’d like to know. In a previous life as an IFA I have met many pensioners who solely use their state pension to pay for two or more holidays a year. I’m not saying they aren’t entitled to have a holiday its more a case of is that a good use of taxpayers money? Tin helmet and sandbags in place…….

  3. NHS reforms to be more like USA are you mental, have you been watching too many episodes of House and ER?

    America has one of the biggest Gaps in health care in the developed world, have you not be listening to the stuff Mr Obama has been putting in place to reform this.

    We need a better health service but not this buffoonery of an idea to mirror something that is fundamentally flawed

    What’s next compulsory euthanasia for the over 70’s or anyone with aids or cancer to say money.

  4. Colin sorry go back to the gold club or the masonic lodge or whereever your type hide at night, you are not living in the real world…..NHS…higher level tax people not working. only thing you missed from this is reintroduction of slaves for rich people

  5. Steven Farrall (Adviser Alliance) 20th April 2010 at 6:32 pm

    1. Shift balance of taxation from work and capital to land.
    2. Aim to reduce state spending to 25% of GDP in 10 years.
    3. Privatise education and health and set up a voucher system.
    4. Shut down most of the quangos.
    5. Burn down the FSA, salt the land it is built on build a giant bonfire of its bonkers bureaucratic rulebook and dance naked over the ashes.

  6. What a shame most of us have dispensed with open fireplaces – we could get the kids up the chimneys again as well! Obviously he’s not only been watching too much House and ER, he must have Oliver on a tape loop as well.
    Re the pension age of 75, no doubt his idea is that many hundreds of thousands, if not millions, won’t qualify, as they’ll have suffered a severe attack of death from working so long, particularly those in physically demanding jobs. To use a popular phrase from my neck of the woods – Wise up!

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