UK financial advisers are almost unanimous in their belief that taxes will rise in the forthcoming Budget, according to new research from investment manager Downing.
The firm’s latest survey found that 99% of advisers and wealth managers expect the Chancellor to raise taxes next month, with Employee National Insurance and Corporation Tax viewed as the most likely targets.
Nearly seven in ten respondents (69%) predicted an increase in Employee National Insurance, while around two-thirds (64%) expect a rise in Corporation Tax.
A further 57% anticipate higher VAT rates, and 38% believe Income Tax could increase. Only 18% of respondents expect an increase in Inheritance Tax (IHT), and just 8% think stamp duty will be raised.
Mark Dunn, head of retail sales at Downing, said: “What we are seeing is a clear signal that advisers anticipate further tax changes in the Budget.
“The challenge now is not simply predicting these changes, but ensuring financial plans and portfolios are well-positioned to adapt.
“That’s where we believe tax-efficient and growth-focused investment strategies can play an important role.
“The consensus around rising taxes reflects a wider shift in sentiment that advisers are increasingly aware that fiscal policy is likely to become more challenging.
“In this kind of environment, we believe robust, tax-efficient investment strategies will be key to maintaining clients’ after-tax returns and supporting their long-term financial goals.”
Downing recently launched the Downing Growth Estate Planning Service, which aims to provide IHT relief after two years if held at the date of death, and targets annual returns of between 5% and 7%.
The service could appeal to younger investors with longer investment horizons who may face future IHT liabilities following recent pension reforms.
It also includes Wealth Guard, a built-in downside protection feature that covers a fall in value of up to 20% of the initial investment at no extra cost.
The service forms part of Downing’s estate planning suite, which manages £1.2bn across asset-backed, BR-qualifying businesses.
