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UK Brokers Hope Internet Campaign Will End Stamp Duty On Share Dealing

Philip Morton, Investors Offshore.com

23 February 2001

Stamp duty on UK share transactions is perceived as a severe burden to retail investors, so Apcims, the UK private retail client broker association, is co-ordinating a campaign to pressure Chancellor Gordon Brown into lifting the tax. At the heart of its initiative is a new website petition, launched earlier this week, which the organisation intends to present to Mr Brown on the eve of the UK budget in March 2001.

StampOutStampDuty.com says that the stamp duty is "an archaic tax" levied on UK investors every time they buy stocks and shares in UK-registered companies. Those behind the campaign says it threatens the UK’s position as a world leader in financial services and could result in 'major UK businesses registering abroad within a matter of months, as the UK moves increasingly out of step with its overseas competitors.'

The Stamp Out Stamp Duty campaign is a coalition of UK investors, financial institutions, the media and heads of business who are working together to get stamp duty on share transactions reduced or removed. The campaign website sets out the issues at stake, presents independent research and news stories outlining the threat to the UK economy and invites interested parties to have their say, either by sending in comments or by signing the online petition.

Those who are seeking the abolition of stamp duty say the UK market is losing its competitiveness by holding on to the outdated tax. Whilst the tax itself is not complex - it's a simple levy of 0.5 per cent on every investor's share purchase - it does have serious implications for the future of the UK economy, says the Stamp Out Stamp Duty campaign. It says:

  • the UK is the last major economy to impose a tax on share transactions – we are seriously out of step with our international competitors

  • with the advent of international share trading, UK companies seeking to avoid stamp duty can choose to register abroad and still have access to the same international pool of investors

  • investors who are following the Government’s advice to invest more to secure their own financial futures are being taxed via stamp duty for doing so

  • if stamp duty on share trades were abolished, the increased values of shares would result in increased revenues in other taxes such as capital gains tax (CGT).

Hopes for the abolition of stamp duty always seem to come to the fore in the weeks before the Budget, yet this year there is the genuine feeling that brokers and investors could finally see either a cut in the tax or its complete annihilation, given that the Treasury's coffers are bulging, a general election is just around the corner and the government wants to keep the business community happy (at least until the May election!)

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