I saw a tweet today by Gemma Godfrey, which summarised an element of the Paradise Papers tax furore into 140 characters. It went something like this:
Tax Evasion: Illegal
Tax Avoidance: Within the letter of the law but not the spirit
Tax Relief: Government endorsed to encourage good behaviour
I thought it was great because only last weekend, whilst at a social engagement, I was introduced to someone new and inevitably the question of ‘what do you do for a living’ came up in conversation. As you know, it’s sometimes a little difficult explaining what you really do within a punchy one-liner and having explained that ‘I provide financial planning and wealth management services’ the immediate response I received was ‘so you help the rich get richer’. Not exactly the response I was expecting and also very far from the fact.
So when I saw the tweet above today, it resonated because of its simplicity and its meaning to me and many of our clients at Bunker Riley Financial Planning. It strikes me that if you have amassed or are working towards amassing a significant sum of money for later life through your own endeavours and diligent saving, then managing your finances with the use of the Governments fully endorsed tax relief (whichever party is in power) and with good behaviour, is very different to those who engage in the process of legal tax avoidance, making the rich richer.
At Bunker Riley, we don’t use hidden, complex or offshore structures whose main objective is primarily to avoid tax and we don’t advise the super-rich. We work with people like you and me and we help them achieve common financial goals by putting in place a plan within which we can make use of tax-privileged pensions, ISAs, Capital Gains Tax and Inheritance Tax allowances, which are available to all. We also employ universally available investment management techniques such as asset allocation and risk management and in my mind, this is not us making the rich richer, it’s just sensible, no frills money management that anyone can apply. Whether money is tight and you’re only able to put aside a few pounds into your employer’s workplace pension or you’re the CEO of a large organisation with significant sums to spare, you’re both investors with access to the same tax relief regime and investment management techniques.
Diligent money management is nothing to be ashamed of and the next time someone asks me what I do, I’ll now have a response which explains that clearly.