The IMA's representation mainly highlights:

• the issues impacting the competitiveness of the UK industry;
• the need for a fair, non-discriminatory treatment of offshore investment;
• a certain, predictable and simplified tax environment;
• and initiatives to encourage savings and wise management of retirement income.

In particular, it calls for the abolition of the fund specific Stamp Duty Reserve Tax (SDRT) regime, a resolution of the VAT treatment of UK investment management services provided to offshore funds and an increased ISA limit of GBP9,600.

The fund specific SDRT regime is unique to the UK, making UK funds less marketable than their European counterparts. Schedule 19 SDRT is in addition to the SDRT charged on purchases by funds of UK shares and gives the Treasury an annual tax take of GBP70m.

IMA believes the cost of abolition would be offset by the increased business and employment tax from the industry if funds were not domiciled offshore due to more favourable tax treatment. A report by IMA and KPMG puts the tax loss to the Treasury at GBP720,000 for every GBP1bn of funds domiciled offshore, instead of in the UK.

IMA's members provide investment management services to funds totalling approximately GBP456bn domiciled elsewhere. Had these funds been domiciled in the UK, the government would have received approximately GBP328m of additional tax revenue per annum from the industry.

IMA also calls for an urgent resolution to the VAT treatment of investment management services provided by UK firms to offshore funds, so that UK managers will be able to continue to recover the input VAT they offer related to those services.

Given the current issues surrounding pension provision, IMA supports initiatives which encourage people to save and manage retirement income wisely. Tax treatment of savings plays an important role in this. IMA therefore urges the Government to increase the ISA limit to GBP9,600, putting it to a level that reflects inflationary increases since its introduction.

Commenting, Richard Saunders, Chief Executive of IMA said:

"It is crucial that the UK industry remains competitive with both other fund domiciles and other potential investment management centres. We must ensure the UK's tax regime is certain, predictable, simple and therefore competitive. Otherwise, we could be in danger of hindering the further development of the UK as a global centre for investment management, which would in turn impact the UK tax-take. We have made some progress on a number of points thanks to open dialogue with the Treasury and HMRC, and ask for further progress in the pre Budget report."