The Big Question - FDs oppose ISAs

Plans to introduce individual savings accounts have received a massive thumbs down from finance directors, this week’s Big Question has revealed.

More than half (51%) were ‘strongly in favour’ of Chancellor Gordon Brown ditching the introduction of ISAs and sticking with the popular PEP and TESSA regime. A further 20% were slightly in favour.

Just 4% backed Brown wholeheartedly in the poll of 200 FDs by Accountancy Age and Reed Accountancy Personnel, while 14% were slightly in favour of ISAs. The chancellor is due to reveal his final proposals for ISAs in next month’s Budget.

ISA objections centred on the proposed #50,000 transfer limit, but Bob Smithson, FD of Interactive Products, said it was unacceptable to change the tax system because of political ideology.

‘It rides roughshod over people’s planning for the future,’ added Smithson, ‘and makes a flawed assumption that it is possible to entice those in lower earnings groups to save in this way. It also penalises those who have already had the foresight to save.’

Chris Denby, of British Arab Commercial Bank, added: ‘I understand the government’s desire to limit the amount of tax relief available from savings schemes, but this would have been more easily achieved by capping savings into PEPs and TESSAs.’