24th November 2008
APCIMS welcomes Government intervention to build consumer confidence
The Association of Private Client Investment Managers and Stockbrokers welcomes emergency measures by the Government to boost the economy. The key is whether the markets will respond well to the measures announced today and early indications of market confidence look encouraging. APCIMS believes that measures to increase consumer confidence will result in reflected confidence in the markets.
APCIMS also believes that the Government needs to maintain the competitive advantage of the UK given the current economic conditions.
David Bennett, CEO of APCIMS said:
“We welcome the Chancellor’s attempts to boost consumer confidence. It is also good news that the Government plans to bring Corporation Tax in line with European counterparts.
“However there is no mention of stamp duty. Reducing stamp duty on shares would help boost the UK’s competitive advantage and stimulate share trading. The stamp duty rate of 0.5% in the UK is the largest of any G7 country and has not been reduced since 1986. France, Germany, Italy, The Netherlands and Luxembourg have abolished stamp duty. The US stamp duty rate is 0.0003%.
“On VAT reductions the proof of the pudding will be in the eating but the measure is likely to make people feel they have more money in their pockets and therefore likely to encourage retail spending. Real business investment growth tends to follow consumer confidence so measures to improve consumer confidence are essential.
“Increasing income tax on high rate tax payers is a populist move worth £1.2 billion to the Treasury which is a drop in the ocean given we are talking about borrowing in the region of £120 billion when implemented in 2011.
“Although it may be popular to raise tax on those earning over £150,000, this measure may impact share transactions which will affect the markets. Taking money away from those who would invest in the markets, and UK businesses will may well take its toll. We want high skill, high paid individuals to continue to live in the UK and taxing high earners does not help.”
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For more information please contact:
Dirk Paterson, Head of Communications, APCIMS
on 020 7448 7100
Mobile: 07507 855 428
Email: dirkp@apcims.co.uk
Notes to editors:
APCIMS
- More than 12 million people in the UK currently invest directly in stocks and shares and other financial instruments to secure their financial futures
- APCIMS represents over 140 firms all over the UK who deal primarily in stocks and shares on behalf of individuals and the institutions in which we have our money
- Around £400 billion of the country’s wealth is under the management of our members
- Our aim is to ensure that the regulatory, tax and other changes across Europe minimize impact on the investment community
- We want to lead the debate on regulation in Europe, with UK regulators and with British parliamentarians to make sure consumers are protected while at the same time our industry flourishes in the UK
Stamp Duty/SDRT
- Stamp duty of 0.5 percent is payable on the purchase of shares. Stamp duty is also payable if any shares are transferred to you, either electronically (SDRT) or by stock transfer forms.
- Stamp duty/SDRT currently provides the Government with around £3 billion a year in revenue.
- The Conservative Party announced that it was examining a reduction in stamp duty in a Conservative press release of 2 May 2007
- A Report by Oxera on behalf of the Corporation of the City of London, the Association of British Insurers and the Investment Managers Association in 2007 suggested that the abolition of stamp duty /SDRT would boost share values by £146 billion
- SDRT Stamp Duty Reserve Tax (SDRT) was introduced in 1986 to deal with transactions in shares where no instrument of transfer was executed and which were therefore outside the scope of Stamp Duty. It is a transaction tax, charged on ‘agreements to transfer chargeable securities’ unlike Stamp Duty which is charged upon documents.
- The Conservative Party Tax reform Commission chaired by Lord Forsyth of Drumlean, the former Scottish Secretary, reported its findings in 2006. The report suggests that stamp duty increases the volatility of share prices and harms the UK's attractiveness as a financial centre. The Commission believes the absence of stamp duty on shares has also led to the growth of offshore funds based in centres such as Dublin and Luxembourg and suggests that UK share are depressed by 10% as a result of the tax.