Government legislation goes through a feedback process before it is put into action. In this TV show Pamela Sayers of Smith & Williamson discusses the consultation process and timelines for the 2014 Finance Bill.

Government legislation consultation: Finance Bill

There was the announcement in the budget last March that the Revenue were going to issue this consultation document, which they duly did two months later in May 2013, and that consultation received many representations from over 100 people, from professions, like ourselves, law firms, other organisations, and then those representations were made by the beginning of August and then we heard nothing more until the Autumn Statement on 5th December. And what we have now is some draft legislation for the 2014 Finance Bill, together with some guidance, some final consultation document, which is so significantly different to the original consultation. So the position we’re in now is there has been very little time, in fact just less than three months, for partnerships to put their affairs in a way so that they’re not going to be affected significantly by the new, quite strict proposals effective from 6th April 2014.

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Tax law and the market it applies to is changing so much that it can be easy make a regrettable mistake unless you have a good advisor. In TV show Mike Fosberry discusses dealing with recent changes.

Tax law since the coalition

Essentially there are two big factors. Firstly, the taxation scene there's been a huge number of changes, particularly since the coalition government came to power. And we've seen raft upon raft of tax legislation. We've seen a far more aggressive stance taken by the Inland Revenue and by government in relation to what they perceive is tax avoidance. Tax avoidance at the end of the day is not illegal, tax evasion is. But they've almost been classified in the same way. So, I mean, taxation first of all is a big issue for high net worth families and it's a constantly evolving scene. I think the other aspect to it is that investment markets having been so, how can I put it, irrational, it's been quite a difficult period for anyone managing money and unless you're a professional I think you can really take some very wrong turns. _______________________________________________________________________________ Tax law is just one issue discussed on Inside Finance TV. There are videos clips fr0m dozens of interviewees across varying industries.  

In this TV show Smith & Williamson's Mike Fosberry discusses navigating through changing pension regulations for person centred planning.

Person centred planning - Pensions

The important part of it is that they are very tax efficient investments. You get full tax relief on input into pensions and the funds grow in a tax exempt environment. So from the perspective of building up long term funds for your retirement, it's obviously a starting point. Having said that, the government has been taking quite significant steps ever since 2006 when pensions simplification and simplification, it's anything but simple quite honestly because ever since then we've had a raft of pension changes which has really restricted the attractions of pensions investment for many people. It's happened in two particular ways, firstly the amount of contributions that people can put into pensions has been seriously restricted. So for example, in the old days you used to be able to pay large contributions to catch up past pension rights on the basis that you've received an inheritance or something of that nature. Going forward we are seeing pension contributions currently are restricted to a maximum of £50,000 per annum, from next year that's going down to £40,000. We're also seeing a cap on pension fund limits so currently we have a cap of £1.5 million of value in terms of the maximum pension fund you accrue. You can't draw on that pension fund before you're age 55 under the current rules but that cap is now being reduced to £1.25 million. So a lot of people who are currently saving for pensions for the long term, may be in a situation unknowingly almost where they're going to hit one of these cap. And the penalties are actually quite severe because if you exceed the cap, the tax rate on any excess is 55%. So a lot of our planning at the moment is trying to help people in that situation and to look at where they might be in the future. And a lot of the way basis of valuation of pension funds is actually quite arbitrary. So if you're a member of a defined benefit pension scheme which is promising to pay you a pension when you retire, that's valued from a capital perspective on a multiple of the value of the pension 20 times the pension. What basis that has to reality, who knows. But some treasury mandarin obviously came up with this idea. If you have a money purchase scheme, it's based on the size of your pot when you come to draw benefits. So a lot of people in their early 40s who may have what they considered to be relatively modest pension funds, if you think about future investment returns plus contributions going in, they could very easily test those caps in the future. _________________________________________________________________________ If you found this video about Person centred planning interesting why not watch more TV shows on Inside Finance?

if you’re better governed you become more efficient. Secondly, that once you’re better governed and you’ve got all of those systems into place, that you are enjoying stronger stakeholder support for what you’re seeking to achieve, and that’s very important. But that said, we are acknowledged globally as one of the leaders, one of the proponents of good practice, governance. And that’s good feedback for us because we want to know that we are getting somewhere. However we still continue to encounter organisational collapse. We still continue to encounter cases of value destruction. And that tells us that we can’t be complacent about the systems we are putting into place. But certainly as far as the financial sector is concerned, despite the fact that we’ve had a double recession and people even talking about a third recession after that, most of our corporate world have survived intact and continues to perform well. And we will put that down to the fact that our companies are well run and well governed.

Cyber risk has become hugely topical now really because governments are starting to understand the importance of it. Someone said to me recently there are only two types of companies, those who know that they’ve had a cyber attack and those that don’t. But everybody’s had them in some form or other. It has become a very important to governments, including the UK government and it really needs to now come onto the agenda of boards. Boards need to be looking at it but it’s not just an IT issue. People have thought about it as an IT issue having a cyber attack. But it’s much more complex now and the old idea of corporate espionage, for want of a better term has moved into this space. Companies are very much at risk now of having their information stolen effectively, and that can be corporate secrets of any kind. So the risks are much higher than they ever were, and it’s not just corporates, we see it in other areas such as the forces, the concerns are growing there. But it’s certainly raising … the profiling of this is growing. It’s becoming more and more important and government is certainly concerned that this is where everybody’s at risk.