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The fair way forward

The coalition needs to simplify taxes and make them transparent

Bruce Wilson
Bruce Wilson

By the time you read this we will know what is in the Chancellor’s first Budget.

What would I like to see from this Government? The top priority should be introducing a concept of fairness in the taxation system. This is something that has been off kilter for far too long and the coalition has a duty to create a tax system that is clear, transparent and fair. There must be no more loopholes where a wealthy non-dom ends up paying less tax than his cleaner.

The financial services industry has strict guidelines to follow when it comes to treating customers fairly and I think the Government must follow suit.

I would like to see the age of compulsory retirement pushed back to about 70. People are living longer and, due to changes in pension systems and a decade of poor equity investment, they do not have nearly enough to retire on. This would also solve the problem for those who do not want to retire earlier.

Many people – including myself – find a great deal of meaning in work and would lose their sense of purpose without it. Pushing back the retirement age would be a simple thing for the Government and would start to address the black hole that is the majority of people’s pension funds.

Going back to the fairness aspect, I also think there should be a level playing field when it comes to pension schemes. This is not something that should be based on personal wealth, so the highest-earners get the highest tax relief, as it is completely unsustainable.

I believe a flat rate of income tax relief of, say, 30 per cent would encourage everyone to save. Some of the huge pensions payable to captains of industry, MPs, judges and senior public servants cause outrage and early retirement for the police and firemen also create the perception of a two-tier system.

What do I not want to see?

Obviously, the Government has a difficult job on its hands and some decisions will be very unpopular, even if deemed necessary. The worst thing it could do would be to introduce measures that cause a kneejerk reaction – the proposed large rise in capital gains tax could be one such example.

This is a time when people need reassurance, not upheaval. There should be no more costs for those running businesses and no more Government interference.

We need simplifications so we can make justified business decisions. Too much legislation can only hinder, not help.

Bruce Wilson is managing director of Helm Godfrey

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