and JOHN RENTOUL
Businessmen worried about higher taxes under a Labour government are flocking to seminars held by a leading firm of accountants to learn how to switch their money out of the country.
The accountancy firm KPMG has invited its clients, and a target list of business people, to 150 seminars across the country where they have been briefed on the tax rises the firm thinks are likely if Labour wins the next election.
Labour's Treasury spokesman, Alistair Darling, last night dismissed the exercise."People should bear in mind that many of the advisers who recommend changing investments take a large commission or fee every time. All advice, warnings and threats should be taken with a large pinch of salt," he said.
A KPMG document headed "Pre-Election Tax Planning", obtained by the Independent, suggests that people with incomes of over pounds 40,000 a year "will have less disposable income" under Labour. They, and those with investment income, It says they, and those with investment income, should consider:
t the use of offshore trusts
t disposal of short-term investments before the election, placing assets in trust for children or other dependents
t maximum use of tax-free investments now in case they are withdrawn by Labour
t early retirement to take advantage of favourable capital gains tax rules.
KPMG, whose management consultancy arm does work for several government departments, speculates that Labour could bring in a new top rate of income tax at 50p or 60p in the pound. In the absence of recent firm policy statements their figures rely heavily on Labour's policies at the last election. Labour only proposed a 50p rate in its last manifesto, but the Tories have claimed that parliamentary questions tabled late last year on the likely yield from a 60p tax rate by Nigel Griffiths, a Labour trade spokesman close to the shadow Chancellor, were evidence of secret Labour plans.
Mr Darling said: "Anyone who thinks we're going to be fighting this election on the last election's manifesto seriously needs to examine their thinking."
KPMG admits the seminars have proved a successful way of attracting business. "We are not double-glazing salesmen, but the meetings have been profile- raising and they let people know we are in the market to give good advice," said John Turbervill, senior tax manager at KPMG's Bristol office.
Mr Turbervill said the success of the seminars was not surprising. "It is not hard to get people to come to a seminar where the subject is protecting yourself against higher taxes under a Labour government."
He said his clients were only engaged in legally reducing their tax bills. The idea of the extra revenue going to education and the health service was one most business people thought "a good idea in principle, but not for me, thanks", he said.
Scott Davidson, one-time keyboard player with bands the Pet Shop Boys and Bros, and now a successful newspaper publisher and chairman of Bristol City FC, said the seminar he attended covered a good variety of topics.
He said: "Politics is not something I take a great deal of interest in, but I am concerned that incentives for people to invest may be lost. Entrepreneurs like myself, who put [their] house on the line to reap some benefit, regard the return to 1970s tax rates as horrifying."
In the South-west 250 people had attended the seminars run by KPMG's Bristol office in various luxury hotels. The first series were held before 5 April so that urgent action could be taken in the last tax year.
Labour's tax spectre, page 2
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