I would not be so crass as to suggest that the unemployed get a job to avoid the job seekers benefit, or that the sick take a cure to avoid the taxable incapacity benefit.
But those with some savings - probably facing the biggest rise in taxes and National Insurance, and maybe the shrinking of tax relief on the married couple's allowance and the mortgage interest as well - may have some fresh ideas to ponder.
The most obvious is the venture capital investment trust sector. The Chancellor announced that from 1995 there would be a replacement for the Business Expansion Scheme, which finally gets the chop at the end of this year.
Investors in the venture capital trusts will have PEP- type privileges - freedom from income tax and capital gains tax.
Would it be a good idea to pile into one of the existing venture capital trusts ahead of the change? It is not decided whether the up-and-running trusts will be able to convert into the new-style trusts.
If they can, then demand might be brisk ahead of the changeover, even though there would have to be a start-date for the tax exemption. The sector sells on a discount of around 15 per cent to net assets and a narrowing of that discount alone could do a power of good to the share price.
There is also the risk that if they are left completely out in the cold and only fresh start-ups qualify, there could be the opposite effect, although this might be slight as the bulk of their funds come from institutions rather than the public.
The sector should benefit from any upturn in the economy, so could provide an exciting ride over the next few years. Many of the funds such as Electra, Murray Ventures and F&C Ventures run savings schemes. Putting a little into these funds every month would be a good way to benefit from the ups without being crushed too badly by the downs.
THE Chancellor shone the spotlight on National Savings when he announced the launch of the first fixed-interest income bond. National Savings already offers fixes on capital growth products, but its only income-paying deal pays a variable rate.
The new bond is being heralded as a benefit for the elderly, who are suffering from falling interest rates, and will be offered at a 'competitive' rate.
The rates on offer across the whole of the National Savings menu look highly competitive at the moment.
The five-year 40th issue certificates pay 5.75 per cent tax free, while the taxable Capital Bonds pay 7.75 per cent. The one-year First Option Bond is on 4.75 per cent net, and Premium Bonds promise an overall return of 5 per cent. That's not bad with base rates at 5.5 per cent.
It looks as if interest rates will stay low for a while, so it's a case of buy now before rates are cut.
ONE of the most cheering things in the Budget was the Government's pledge to allow 9 million taxpayers to work out their own tax. These are people who have to fill in a tax return either because they are self-employed or because they have more complicated tax affairs.
Self-assessment will bring a simpler system. All that wasteful and frustrating business of waiting for the Revenue's estimate and then having to challenge it can be swept away.
The critics say that self- assessment is a canny way of privatising the Revenue by getting taxpayers to do all the work themselves. But as least it will be work on a clean sheet of paper rather than disputing someone else's figures. Self-assessment must be a better way forward as it gives taxpayers the initiative.Reuse content