The following Article was brought to my attention by Steven Sussman from Honister Partners Independent Financial Advisors


The formation of the coalition government and the Queen's speech have given IFAs and clients much to think about.

What’s your view?  Certainly, the relevant Bills and proposals will impact on our business, in particular financial advisers and financial planning.

The overall ethos of the agreement will be of interest, too, because in many ways it fits in with how advisers work. It promises to deliver "radical, reforming government, a stronger society, a smaller state and put power and responsibility in the hands of every citizen”.

The emphasis on responsibility is something where advisers can offer help.There will be more on that in a later post. For now, let's stick to it, the details:

Banking

The coalition says it will reform the banking system to avoid a repeat of the financial crisis, introducing a banking levy while clamping down on 'unacceptable' bonuses.

It will promote mutual financial organisations and encourage more competition in the banking sector.

It will take action to ensure a flow of credit to viable small and medium-sized businesses which may include a major loan guarantee scheme and enforce net lending targets on the nationalised banks.

It aims to reduce systemic risk within the banking system and is setting up an independent commission to investigate separating retail and investment banking.

It will give the Bank of England control of macro-prudential regulation and oversight of micro-prudential regulation.

It will also carry out work with the Bank of England to investigate how to incorporate housing costs into the Consumer Price Index inflation measure.

It will create Britain’s first free national financial advice service funded through a new social responsibility levy on the financial services sector and create a single agency to take on the work of tackling serious economic crime.

Pensions

The coalition says it will cut red tape by introducing a ‘one-in, one-out’ rule for new regulations. It promises to end the culture of ‘tick-box’ regulation and to target regulatory inspections on high-risk organisations.

It will impose ‘sunset clauses’ on regulations and regulators so each regulation is regularly reviewed.

It will seek a practical way to make small business rate relief automatic and simplify the reliefs and allowances surrounding the corporate tax system.

It will bid to reduce business tax avoidance and bring down the headline rate.

It will end the ‘gold-plating’ of EU rules to ensure British businesses are not given a poorer deal relative to their European competitors.

Broader Taxation

It will increase the personal allowance for income tax from April 2011.

It will allow Employer National Insurance thresholds proposed by the Conservatives to go ahead in order to stop what they call Labour's jobs tax.

It will increase the personal allowance to £10,000, a move that will be prioritised over other tax cuts, including cuts to Inheritance Tax.

It will allow Liberal Democrat MPs to abstain on budget resolutions to introduce transferable tax allowances for married couples without prejudicing the coalition agreement.

It will investigate ways of taxing non-business capital gains at rates similar or close to those applied to income, with what it calls generous exemptions for entrepreneurial business activities.

It will make every effort to tackle tax avoidance and review the taxation of people who do not live in this country.

Housing

It will review the effectiveness of the raising of the stamp duty threshold for first-time buyers.

It will retain energy performance certificates while scrapping Home Information Packs with immediate effect.

It will promote shared ownership schemes and help social tenants and others to own or part-own their home.

Office of Budget Responsibility

It is empowering Chancellor George Osborne to set up an independent Office of Budget Responsibility. The coalition agreement says the OBR will remove No 11's ability to "fiddle the figures" and set growth and borrowing forecasts “which all politicians could be confident in”. It will be headed by Sir Alan Budd, a former chief economic adviser to the Treasury.

Emergency Budget

It will set out many of these measures in an Emergency budget on 22 June, although the timetable for tax changes may be almost as important as the changes themselves when it comes to financial planning.

It isn't all going to be good news. There are certainly some matters for concern about how the CGT proposals could be implemented - as always the devil being very much in the detail. But overall this looks like a coherent programme and a marked improvement on previous squabbling.

It will be on this blog that I will be highlighting the big tax and business issues as and when they happen.

BUT

It is your views that are now wanted on what all this means in practice.The formation of the coalition government and the Queen's speech have given IFAs and clients much to think about.

What’s your view?  Certainly, the relevant Bills and proposals will impact on our business, in particular financial advisers and financial planning.

The overall ethos of the agreement will be of interest, too, because in many ways it fits in with how advisers work. It promises to deliver "radical, reforming government, a stronger society, a smaller state and put power and responsibility in the hands of every citizen”.

The emphasis on responsibility is something where advisers can offer help.There will be more on that in a later post. For now, let's stick to it, the details:

Banking