IFAs’ wish list for a new chancellor

A new prime minister is due to be announced on September 5, after which a new cabinet will also be confirmed.

So what do IFAs want the new chancellor to put top of their list?

“It is a price cap freeze all the way for me,” said Tim Morris, an IFA at Russell & Co, when asked what priorities he would like the incoming chancellor to focus on.

Morris said this would be paid for by a windfall tax, though appreciated that this would be a “double whammy” for energy companies.

We should be nurturing the rental marketGraham Taylor, Hudson Rose

Harry Katz, a former IFA, opposed that view, and said the windfall tax should be scrapped if energy companies institute a number of measures within a certain time frame including extracting the rest of oil and gas in the UK, building incineration plants powered by refuse, and starting to use wave power.

“The climate levy and VAT charges on domestic gas and electricity should [also] be scrapped,” he said.

Energy prices are set to soar this winter as the war in Ukraine and resulting sanctions in Russia have pushed up the price of gas.

The rate of price rises in the sector prompted a prediction of inflation hitting 18.6 per cent in January next year.

Buy-to-let

Hudson Rose managing director Graham Taylor said it would be helpful for the government to re-think the treatment of BTL stamp duty.

“With BTL being a less attractive option for investors, this is reducing the available stock on the rental market and inevitably pushing up rents,” he said.

“We should be nurturing the rental market to help those for whom home ownership is looking more unlikely by the year.”

Parts of the UK - particularly London - are becoming less attractive prospects for property investment returns as buy-to-let growth stalls. So much so that some investors are turning to cryptocurrency over property for bigger gains.

Scrap the lifetime allowanceBen Yearsley, Fairview Investing

In the past five years, the government has made a series of reforms which have affected buy-to-let investors. These include a 3 per cent stamp duty surcharge, more stringent affordability tests and reforms to mortgage relief.

And now, with mortgage rates on the rise, the levels of investment required to secure a buy-to-let mortgage are only getting higher.

Pensions

Simon Harrington, head of public affairs at Pimfa, said the new chancellor should look at Mifid II and at “a minimum” look at the disclosures and reporting requirements within it.

The Mifid II costs and charges disclosure rules require that firms give clients information on all costs and associated charges before the relevant service is provided.

For IFAs who run portfolios, individual client authorisation is now required each time the portfolio is rebalanced or changed, and businesses must also make a personalised suitability assessment and issue pre/post-trade cost and charges disclosures.

These changes have led some to say that Mifid II has made centralised investment propositions “unmanageable”.

Finally, for Ben Yearsley, investment consultant at Fairview Investing, change is needed on pension allowances.

“Scrap the lifetime allowance and do something with the annual allowance, maybe in exchange for capping tax free cash at much lower level,” he said.

sally.hickey@ft.com, additional reporting by Ruby Hinchliffe