Spring Budget 2024: Contractors’ financial adviser backs Hunt saying a British ISA ‘could be very good’

A financial adviser to contractors has given a guarded welcome to a new British ISA potentially being unveiled at Spring Budget 2024.

But the adviser, Yolo Wealth, says the chancellor reportedly saying, “a British ISA could be very good at” getting “more UK capital…invested in our most promising companies”, won’t be just a boon for contractors.

'Contractors will like'

Angela James, Yolo’s boss told ContractorUK: “A new British ISA designed to incentivise and encourage investment in the UK stock market will please the market itself.

“But it’s the suggestion that the 0.5% stamp duty on certain shares with this new ISA won’t apply up to a certain amount of share-purchases, which contractors will like.”

Typically, contractors like to invest in some direct shares “to satisfy their desire to dabble” and take risks, James said.

Contractors’ larger investments, such as those dedicated to their retirement, then get left to fund managers -- for them to take the risks.

'British ISA would give contractors something new to explore'

Fresh from advising ContractorUK readers of only 51 days left to use 2023-24 allowances, including on ISAs, James continued:

“If it emerges at Spring Budget 2024, an ISA allowing tax-free share purchases up to a certain amount, would give contractors something new to explore.

“But I’d advise against any decisions right now. The devil will likely be in the detail, and at this stage, there’s speculation not detail.”

In his comments to an event hosted by financial services lobbyist TheCity UK, Hunt said “things that might be on the Budget” he is not “really able to answer” on.

'Unbalanced investment portfolio'

Should the British ISA emerge on Wednesday March 6th, it will be interesting to see whether it comes with any (additional) favourable terms, says Beckworth Financial Services director Jonathan Wadsworth.

“On a cautionary note, some investment analysts have raised a concern that prioritising investments in British companies could lead to an unbalanced investment portfolio,” Wadsworth warned online.

Also taking to LinkedIn and similarly sounding cautious about the British ISA, is Laurence Field, tax partner at Crowe UK:

“There are currently five [Individual Savings Accounts]; cash, stocks and shares, lifetime, junior and innovative finance.

“As a retail offering, adding a sixth is likely to add to the confusion.”

'The future is someone else's problem'

Since Hunt’s reported comments, Field has also said that politicians “love” the ISA, because the investment comes out of taxed income.

“The taxes foregone are in the future,” the Crowe partner said. “[And] the future is someone else's problem. So [politicians] can look generous without it costing them anything – today.”