Previously, issues had been raised about HMRC’s proposed approach, with fears that it could complicate shopping around at retirement. This is because, under previous plans, if an individual decided to switch provider when they brought an annuity, the tax free cash is paid by their original provider.
As a result, the new provider would have been required to contact the previous provider and request they pay a portion of the adviser charge from the tax free cash to the adviser.
However, the revised guidance now states: “A registered pension scheme might make a payment to a financial adviser for the cost of pension advice that is given to the member by the financial adviser in relation to the pension scheme.
“Such pension advice might be in connection with the suitability of fund choice, asset allocation, pension provider, pension taxation or checking against statutory limits.”
The guidance goes on to say: “Also, the advice could cover how to maximise income from the pension fund at retirement or how to maximise the return on existing pre-retirement pension fund or more general advice on the payment outcomes/risks of respectively choosing the type of pension to be taken; scheme pension, lifetime annuity or drawdown.”
As a result, if an adviser charged £500 for advice on the pension options for a member with a £100,000 fund, a tax-free lump sum of £25,000 will still be available, with the charge taken from the remaining £75,000 after it is passed to the annuity provider.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 564 )A member of the Bank of England’s Financial Policy Committee has claimed that banks should be forced to more than double the minimum levels of capital they are required to hold to protect against shocks, if they want current regulations to be lightened.
Speaking in London earlier this week, Robert Jenkins floated the idea of a freeze on new banking regulations and a reassessment of the existing rulebook – if banks can raise their tangible equity capital to twenty percent.
Mr Jenkins said the best solution if banks wanted their burden to be lightened would be to make themselves so strong that the worst economic shocks could be handled with relative ease; adding: “Let me suggest a deal – one which I stress is not in my gift and which I propose in my private capacity only.
“How about a moratorium on all new regulation, followed by a review and rollback of the rule book. In exchange, all banks everywhere would be required to raise their tangible equity capital to twenty percent of assets.”
The comments by Mr Jenkins came as the Bank of England's governor, Sir Mervyn King, called for banking reforms to be passed into law as soon as possible to "prevent the plans being watered down".
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 509 )It has been revealed that UK manufacturing unexpectedly rose during May, as it was boosted by an additional working day, after the government moved a public holiday to June – and this is said to have provided a boost to the economy.
Latest figures released by the Office for National Statistics have revealed that during May, factory output rose by 1.2 percent compared to April’s figures; whilst the overall industrial output increased by one percent for the same period.
The Office for National Statistics have also revealed within the latest figures, that out of just over a dozen categories in manufacturing, eight rose in May and five declined, compared to the previous month.
Despite the figures providing a welcome boost to the UK economy, the Office for National Statistics have warned that May and June’s figures should be taken with caution, as the government had moved the UK’s annual public holiday at the end of May for the Queen’s Jubilee; and also added an extra holiday in June.
The warning from the Office for National Statistics was also echoed by one economist, who said: “It’s a very good number, but it’s entirely because of the extra day during the month. Underneath it all, it is hard to say what the underlying path of manufacturing is.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 489 )HMRC have announced that they are set to extend their Real Time Information (RTI) programme, further from today (July 9th).
RTI was originally launched in April of this year to a select few businesses and pension providers, before being extended at the beginning of May.
As part of the pilot scheme, those businesses and pension providers currently taking part are required to provide HMRC with details of any PAYE changes when they happen, rather than at the end of the tax year.
It is hoped that the scheme will be rolled out by October next year; and with HMRC continuing to be happy with the progress of the pilot, they have revealed that a further 1,000 businesses will be joining the pilot programme between now and the end of September 2012.
Acting Director General for Personal Tax, Stephen Banyard, said of the scheme: “RTI is on track and the pilot is going very well. We started in April with just 10 employers and now we’ve successfully received over 1.7 million individual records from 338 PAYE schemes.
“Following the success of the first pilot stage, more PAYE schemes will join the RTI pilot, as planned, and by the end of September up to 1,300 employer schemes will be reporting PAYE in real time.
“We are also seeing external confidence in the pilot and we’ve responded to that by offering more large employers, payroll bureaux, new employers and software developers the opportunity to join the RTI pilot or to expand existing involvement in advance of the launch date in April 2013.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 505 )The Bank of England’s new financial risk watchdog has said it will be able to support economic growth alongside its primary aim of ensuring financial stability.
From next year, the Bank of England is set to take over most British financial regulations; with the support of their watchdogs; and the FPC's main role is to stop credit booms getting out of control and to monitor risks that cut across individual banks and threaten the financial system as a whole.
Last month, the Chancellor George Osborne announced that he wanted the Financial Policy Committee (FPC) to support government economic policies in the same way its Monetary Policy Committee does.
Although there had been some uncertainty about whether the FPC’s members thought having to take growth into account would distract from their main role; a record of their June 22 meeting showed that the policymakers did not see that there would be a major conflict.
The record is reported to say: “It was noted that the primary objective to protect and enhance resilience and the new secondary objective were compatible.
“Indeed, the committee's recommendations... over the past year had been specifically designed to build resilience while supporting lending and growth.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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