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Nimesh Shah
Rachel Reeves’ plan to invest an additional £300 million in HM Revenue & Customs over the next five years won’t even snag the surface as he tackles the gap between what tax authorities should collect and what they actually do. This lies behind the harsh criticism of HMRC by the government and the Public Accounts Commission.
In my opinion, criticism is not unfair. HMRC’s customer service and standards are the lowest ever, with regular stories of telephone lines and taxpayers not being able to access appropriate information. There is an important task for the HMRC to do before they can gain confidence in growing anywhere near the £1 billion, as the government predicts.
HMRC has won around £1.4 billion in additional government funding over the past three years, and is not sure this is worth the money for taxpayers.
As the UK faces the highest tax burden in 50 years, there remains a great doubt in HMRC’s ability to focus its time and effort on collecting appropriate tax amounts.
The government needs a proper strategy on taxes and future directions for HMRC. The related claims of generating a huge sum of fragmented investments and additional tax revenue are not an answer, and do not convince us that tax issues will be addressed properly.
The main issue is the complexity of the UK tax system, the longest tax law in the world. I sympathize with HMRC in this regard, but throwing more money at the tax authorities doesn’t address the issue.
Nimesh Shah is the CEO of Blick Rothenberg
Christine Ross
The Spring Statement was said to not provide a major tax announcement, but in reality it was not the case. But it raised the question of where the Prime Minister would find the top-up of the tax in the fall budget.
In the meantime, hidden in the documents released after today’s statement is a small paragraph that announces what many have suspected for months. The government intends to reform ISAS.
These tax-efficient savings accounts are very popular, allowing all revenues to hold tax-free cash or stocks and shares at a maximum of one annual limit, particularly to allow savers to hold cash or stocks.
According to the document, the government believes it will “balance between cash and stocks.” Obviously, long-term savings require greater rewards from stock market investments, but all forms of savings should be encouraged.
The fear is that new interference will disrupt and discourage some savers. The phrase comes to mind: “If it’s not broken, don’t fix it.”
Christine Ross is the client director at Handelsbanken Wealth & Asset Management
Simon Noble
Unfortunately, the prime minister’s finances are sandwiched between an economy that slows tax receipts and a steadily rising cost of health and welfare. The National Insurance Rising and Employment Rights Bill is currently in effect and does not encourage UK businesses to be bright.
The main growth item in the Spring Statement is boosting defence spending. This was expected, and stock prices of a small number of major listed defence stocks in the UK rose sharply. Stocks in BAE Systems, Rolls-Royce and Babcock have all grown 30-40% higher in the past few weeks.
These companies are competitive worldwide, but often have close connections with US defense companies, which can be challenging in NATO restructuring.
However, Qinetiq, the UK’s fourth defence stock at the heart of the Aux submarine trade (Australia chose to move submarine orders from France to Britain), gave a profit warning last week. The stock, which rose from 4 to 5, has lost all its profits in the last 12 days. Investing in defense is for the brave.
Simon Edelsten is the fund manager for Goshawk Asset Management and owns a share in Rolls-Royce
