While the limelight-hogging politicians such as Boris Johnson, Chuka Umunna and John McDonnell bicker, it is arguably Chancellor Philip Hammond whom advisers should be keeping an eye on.
He needs money and it may be advisers’ clients he seeks to take it from. Indeed, he may be in the process of drip feeding bad news before the budget later this year.
The Treasury has u-turned over a planned cut to class 2 national insurance contributions citing fairness concerns as Money Marketing reports.
The move would have saved the self-employed around £130 a year. Rather think it’s more about Mr Hammond holding on to as much as £360m a year than fairness.
The move to cut NI was first mooted by George Osborne in 2016, which seems like a very long time ago.
It is very clear that the Chancellor is seeking many different ways to raise money at least partly to fund the around £20bn a year extra promised to the NHS by 2023.
One of those could be the annual allowance with some speculation in recent weeks that it could be cut to £20,000 from the current £40,000 as Professional Adviser reported. Stories of this nature do not generally come out of nowhere and this one may well have its origins in the Treasury. Of course, the Treasury may just be testing out the reaction.
Meanwhile, a report in the Telegraph dismisses the risk to higher rate relief. Oh to know the source!
Finally, the Financial Times has spotted a very significant story. The Government looks set to demand a big rise in the contributions of public sector employers through changes in the discount rate. The Government will make up the difference in 2020 but makes no promise beyond that. It could add up to £4bn a year that public sector employers have to find. If this is intended to help fund more money for the NHS it is a variation on a well-known maxim – robbing from Peter to pay Peter.
The Commission on Economic Justice – organised by the left wing thinktank the IPPR – has offered 10 part plan for the economy produced by experts including several from business. But the point advisers should pay heed to is a suggestion that wealth is taxed in the same way as income. That would be rather revolutionary. Yet it is probably not something IFAs should welcome. At least Mr Hammond is too much of a Conservative to consider this.
The European Court of Justice, while it still holds sway over the UK, has decided that the Pension Protection Fund needs to pay more to some senior executives who have received less than half their pension entitlement.
The case was brought to the European Court by PPF member Grenville Hampshire who suffered a 67% cut to his pension entitlement when his former employer Turner & Newall filed for insolvency in 2006.
Mr Hampshire will not be happy at receiving so much less pension over the years but perhaps he can take solace in this win and indeed in having such an excellent name. The cost looks to be around 1% of PPF reserves so it is affordable though according to some experts it may complicate the insolvency process.
The FCA’s consumer panel says that complex protection products put consumers off the products.
St. James’s Place says it is looking into an independence claim made by one of its advisers to a client.
That is seriously deviating from the script if true.
