Rumours have already begun about income tax cuts but there have also been warnings about the need to rein in government spending.
While it is important that the Government takes recession-specific action, it must not forget the ongoing issues facing the savings and investment industry.
There have been murmurs, fuelled by the Prime Minister himself, about a possible increase to the Isa limit.
The IMA has actively endorsed increasing the stocks and shares Isa limit. Ten years after its launch, the Isa is still a great idea – it offers people a simple, tax-free way of saving. But IMA statistics show that since 2004, stocks and shares Isas have seen year-on-year outflows after the healthy inflows of their early years. This is partly but not exclusively due to stockmarket performance. It is therefore high time to find new savings incentives.
The Government has made a start with personal accounts but more can and should be done. Raising the allowance for the stocks and shares Isa to £9,600 would bring it in line with the level it should be had it risen in line with inflation.
Turning to investment funds, the Government also needs to focus on the issues impacting on the competitiveness of the UK funds industry and the need for offshore investments not to be treated unfairly compared with onshore investments.
One measure we have been calling for is the abolition of the fund-specific stamp duty reserve tax regime.
This is unique to the UK and means that UK funds are simply less attractive than their European counterparts.
What’s more, the cost of abolishing this charge would be offset by the increased business and employment taxes from the industry if funds were domiciled in the UK. It is a no-brainer.
We also want to ensure that there is a simple and fair tax regime for UK residents and funds investing in overseas assets and offshore funds. Reform of the offshore fund regime should provide a simple and fair approach to taxing investments in offshore funds.
The 10 per cent dividend tax credit should also be extended to dividends paid by offshore funds to help level the playing field between UK and offshore funds.
While this all may seem a little removed from the daily busi-ness of investing, it is important for the retail investor that the UK funds industry can remain competitive.
It must have a certain, predictable and simple tax regime that is on a par with its European counterparts. Otherwise, the UK will not be seen as an attractive fund domicile, which will potentially impact on its position as a global centre for invest- ment management.
Mona Patel is head of communications at the Investment Management Association