15 March 2010

Government urged to listen to taxpayers following Brewin Dolphin poll.
47% call for restoration of dividend tax credit
Even split on raising VAT as ‘least worst’ tax increase

With just days until 2010 Budget¹  that will lay out the Government’s detailed plans to restore the public finances, taxpayers want their voice heard with 47 percent making the restoration of the Dividend Tax Credit their top tax issue.   People were evenly split about the idea of increasing VAT with 34% considering it the ‘least worst’ tax increase, but an identical percentage stating it was their least favoured option if tax rises are necessary.  Introducing a flat levy on non doms was highlighted as the second ‘least worst’ tax raising option by 32%.

These priorities are  revealed in a recent poll conducted by Brewin Dolphin, the UK's largest independent investment manager for private clients.  Brewin Dolphin individual clients have a typical portfolio of £250,000 making them a significant and influential electoral audience.

In Brewin Dolphin’s client newsletter various tax measures were discussed, including some from a recent speech²  by the Shadow Chancellor, George Osborne and other taxes that might be anticipated.  Clients responded by ranking both the tax cuts and increases in order of priority to them, to best encourage savings and economic recovery whilst addressing 2010’s record public sector borrowing requirement.

The response was phenomenal with more than1,000 replies received within days of issuing the survey at the end of February.  This is a significant sample of private investors’ views from all across the UK and at a most important point in the economic and political cycle, with the Budget now only ten days away and the General Election in even fewer weeks.

The possible cuts and increases below were ranked by respondents with the following highlights :-

• 47% called for the restoration of dividend tax credits, ahead of raising the Inheritance Tax Threshold (“IHT”) highlighted as a priority by 36% and the reduction of stamp duty by 29%.
• 34% highlighted increasing VAT as the ‘least worst’ tax increase, with an identical percentage stating it was their least favoured option if tax rises are necessary.
• 32% said that introducing a flat levy on non doms was their ‘least worst’ tax raising measure if tax rises are necessary.
• Reducing interest allowable for corporation tax relief and increasing income tax on incomes over £150,000, were highlighted as worse option tax raising measures..

Jamie Matheson, Executive Chairman of Brewin Dolphin said “`The long term costs the Nation will bear as a result of Britain’s pension hole will dwarf  the estimated £5 billion a year the Treasury raised by abolishing the dividend tax credit in 1997. At the time of the PBR in December 2009 we called on Government to restore the Dividend Tax Credit, a sentiment strongly echoed by our clients in this survey.  Once again we would urge the Chancellor to give due consideration to these concerns, which we believe mirror those of the British taxpayer, as he prepares his 2010 Budget and introduce considered measures which will help improve their circumstances and have a positive impact on pension funds, savings and investments.”

¹24th March 2010
² 2nd Feb 2010 – The New Economic Model speech at the British Museum

For further information call Charlotte Back – Head of Corporate Affairs – 0845 213 3331

NOTES TO EDITORS
Tax Survey

• All figures, unless otherwise stated, are from Brewin Dolphin. 
• Total sample size was 1034 adults. Fieldwork was undertaken between 26th February and 12th March 2010. 
• Below is a summary of key findings from the survey, with the red boxes showing the measure and its priority with the most support