Restoration of dividend tax credit called for as investors say it is least painless option

News - Tax

Written by Ray Clancy

Monday, 15 March 2010 09:05

A large number of British investors want the dividend tax credit restored in next week’s budget rather than what they consider less favoured options, according to a new poll.

Some 47% said it is their top tax issue with 34% saying a VAT rise is the ‘least worst’ tax increase, and the same number stating it was their least favoured option if tax rises are necessary, the survey by Brewin Dolphin has found.

Introducing a flat levy on non doms was highlighted as the second ‘least worst’ tax raising option by 32% in the poll from the company, the UK’s largest independent investment manager for private clients.

The respondents, who have a typical portfolio of £250,000 making them a significant and influential electoral audience, ranked both 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.

‘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,’ said Jamie Matheson, Executive Chairman of Brewin Dolphin.

Raising the Inheritance Tax threshold was highlighted as a priority by 36% and the reduction of stamp duty by 29%. Reducing interest allowable for corporation tax relief and increasing income tax on incomes over £150,000, were highlighted as worse option tax raising measures.

‘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,’ said Matheson.

‘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,’ he added.