Dear Mr Balls,
As Shadow Chancellor you have accused the Government of choking off economic recovery and you are calling for VAT to be cut temporarily to boost spending.
In its report on the FSA’s Retail Distribution Review of the entire way in which the UK’s financial services industry functions, the Treasury Select Committee has said that HMRC should set out how VAT will apply and what additional revenues it expects to generate.
It says: “We recommend HMRC, in conjunction with the FSA if necessary, report to us as soon as possible with clear guidance on when VAT will be payable for financial advice under the RDR, why it has not been payable in the past, along with any expected revenues from the change and whether further reform on VAT rules in the area will be needed.”
Mr Balls: can you state clearly whether the Labour party believes that consumers should pay VAT on Customer Agreed Remuneration post RDR in those cases where, prior to RDR, none will have been paid?
The reason for my asking, of course, is that on the one hand the Government is wringing its collective hands about the lack of people saving long-term while, on the other, it is allowing the FSA to press ahead unchecked with reforms which may well result in the cost of advice on this crucially important subject becoming 20% more expensive.
Does this make any sense at all?
Regards
Simon Mansell
Simon Mansell
MD – Temple Bar IFA
