Your Shout: Letters to the editor

Financial Adviser Letters

Financial Adviser Letters

This week...

HMRC wolves on the prowl

HM Revenue & Customs has realised there are many one-man businesses and self-employed they can bleed, both retrospectively and going forward (‘Chancellor’s IR35 promise sparks fresh outrage over review’, Feb 24). 

Local tax inspectors will no doubt have a wide-ranging remit to interpret the IR35 rules and it is unlikely there will be any clemency or humanity applied.

Considering it is the fee paying client who determines the status of the contractor, it will create confusion and mayhem among all involved.

A ‘confirmation of arrangement’ letter is only sticking plaster on a potentially infected wound.

With so many tax regulations open to interpretation, it is inevitable that many small business will be eaten up by the hungry, circling wolf pack that is HMRC.

Clive Fox

Retired IFA


DB market dwindling

Andrew Bailey says over the past two years around 370 companies have left the defined benefit transfer market, which is about 12 per cent of the market ‘370 companies exited DB market, Bailey tells MPs’, see page 17).

As a director of one of the 12 per cent, we do not use high-pressure tactics to secure DB business. Indeed, we do everything to discourage it.

When approached, we explain the regulatory position and that we charge even when the advice is not to transfer.  

Those that are left amount to one or two cases a year, but more often than not, none.  

Why have we left what is an intellectually interesting and challenging business?  

Last year, with the increase of Financial Ombudsman Service awards to £350,000, our insurance company, along with most of the others, took a stance against DB business that they see as high risk; limiting the number of cases we could carry out in any one year to four.  

This was not an issue to us as we have never taken on that many in a year.

In November when our renewal came through, we had a 287 per cent increase in basic premium and a doubling of the excess on all investment and pension business.  

This in turn has had a marked effect on the level of capital we have to hold.

I shopped around but could find no other professional indemnity insurance provider that was prepared to provide cover for our back book of DB pension work (at least our own insurer was providing that) and none that would provide ongoing DB transfer cover.  

We had no option but to give up our DB permissions. 

I am sure some of the companies have been forced by the Financial Conduct Authority to stop, but I suspect many more like us have had no option to stop because the rules state we must have appropriate PI cover.  

While some of the companies no longer offering the service may have given poor advice, it would be better journalism to investigate all 350 companies to find out what sort of advice they had been giving; how many cases a year; how they source the business; how many complaints and any regulatory concerns.