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Watch out for traps

As macro economics dominates, it is no wonder that many clients will fail to see the benefits for them. It is clear that the Chancellor, if not the Prime Minister, hopes the proximity of Christmas will mean the main beneficiaries – those on lower incomes – will feel they can again spend and this infusion of cash into the retail sector will help the country get going.

In other words, they are making sure that those receiving the biggest increase in income will not be those with the habit to save it.

As the calculations are provided in the case studies provided by the national press, our clients should recognise there is a need to navigate carefully though the fiscal traps set by this pre-Budget report.

For IFAs, this provides an ideal opportunity to highlight the need for comprehensive (I detest the word holistic) advice and should not be missed. Where the danger lurks is in the provision of transactional advice where considering matters in isolation has never been so fraught with danger.

The Icelandic government was indignant with the use of anti-terrorism legislation to bring them to heel and I suspect the Channel Islands and the Isle of Man will be concerned they have been blighted and for no apparent good reason other than that it makes good press. I say that as the reference to lower taxes seemed to be aimed at corporate and not individual issues.

So macro to micro, the picture is not positive, the only bright part of today’s theatre being Osborne’s rushed but well targeted response.

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