Press Release

For immediate release: Monday 24th March 2003

SIX LEADING TRADE ASSOCIATIONS JOIN FORCES 

IN FINAL CALL TO SAVE THE ISA TAX CREDIT 

“Tax benefits for the many, and not the few” was the call today from six city Trade Associations who have teamed up

 in an appeal to the Chancellor Gordon Brown to retain the tax credit on the Equity ISA.

The PEP and ISA Managers’ Association (PIMA) and the Investment Management Association (IMA), have joined together 

with the Association of Private Client Investment Managers and Stockbrokers and European Association of Securities 

Dealers (APCIMS), the Association of Investment Trust Companies (AITC), and the Association of Independent Financial 

Advisers (AIFA), and Proshare (the independent organisation that promotes wider share ownership and financial education), 

to ask the Government not to abolish the tax credit for the Equity ISA.

From April 2004 the Government has said it will abolish the 10% tax credit that ISAs receive on dividend distributions.  By 

removing the tax credit, investment in stocks and shares ISAs will only remain attractive to higher-rate taxpayers. The 

Associations taking part believe the Government will be disadvantaging lower income groups from saving in an ISA.

The trade bodies have sent a joint letter to the Chancellor, and a briefing document to MPs, explaining the reasons why the 

dividend tax credit should not be abolished.  In addition, the Associations are seeking an urgent meeting with the Chancellor 

to discuss the effect abolition would have on savings.

Tony Vine-Lott, Director General of PIMA said: “We have been campaigning against the abolition of the tax credit for the 

past year and want to caution the Government that abolition would seriously undermine ISA saving.  Our research shows that 

if the tax-free benefit on stocks and shares ISAs is reduced or abolished, only a third of existing customers would continue to invest in these products” 

Richard Saunders, Chief Executive of the IMA said: “At a time when the Government are trying to encourage the savings 

habit at all income levels, it seems perverse to remove a tax-benefit for those on lower incomes.  ISAs have been a great 

success, and we hope that the Chancellor will reconsider their tax status and keep it as a benefit to the many, and not just 

the few.”

Angela Knight, Chief Executive of APCIMS-EASD, said: “Removing the tax credit sends all the wrong signals to savers at 

a time when people are more tempted than ever before just to keep their money under the bed."

For further information and comment, please contact:

Tony Vine-Lott, PIMA, 07790 006 108

Richard Saunders, IMA, 020 7831 0898

Note to Editors:

1. A copy of the briefing note sent to MPs is included with the release.

2. Recent Research, funded by PIMA, found that:

• If the tax-free benefit is reduced or abolished on stocks and shares ISA’s, only a third of existing customers would continue to invest in these products.

• A knock-on effect for the rest of the equity markets could also be expected, as only two-fifths of customers would expect to invest in these commodities.

• Six in ten consumers expect to seek alternative, tax-free investments in ISA’s, with high interest accounts, pensions and cash ISAs being the likely beneficiaries. 

Attachment 1 - ISA Briefing

65 Kingsway London WC2B 6TD

Tel: +44 (0) 20 7831 0898 Fax:+44 (0) 20 7831 9975

www.investmentuk.org

Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.