In the Current Financial Climate, the Tax Haven Provided by an ISA is More Important Than Ever, Says West Country Accountants

Bristol, United Kingdom, March 20, 2009 --( As the ISA deadline approaches (April 5) West Country accountants Old Mill Financial Services is urging investors to make the most of their tax free allowances.

“Most people don’t take advantage of their full tax free allowance,” says Simon Cole, Chartered Financial Planner at Old Mill Financial Services, “and by not using our full allowance we are in effect, giving money back to the taxman.

“The current allowance is £7,200, up to £3,600 of which can be put into a Cash ISA; the rest - or the entire amount if you wish - can be invested into a Stocks and Shares ISA.

“And, although interest rates are very low at the moment, doesn’t mean its not good financial sense to invest in an ISA.

“In fact, given the level of Government borrowing at the moment, the likelihood is that tax will go up as the treasury needs to create revenue through tax. A way that the individual investor can do something to avoid some of these rises is by making use of any tax breaks they can.”

And, says Mr Cole, ISAs should be at the top of the list for this tax year, and using your new allowance from 6th April onwards – up to £14,400 sheltered from tax in a matter of weeks.

“ISAs offer tax breaks for both higher and basic rate tax payers because you pay no capital gains tax, and no additional income tax making it one of the most tax-efficient ways to save and invest.”

And for those who have already used their allowance but are not happy with the returns they are receiving, transferring your existing ISAs to another ISA fund manager at any time is possible if you are not happy with your current deal.

“Cash ISA rates are not great at the moment,” he said, “and although you can transfer your Cash ISA to another, better paying Cash ISA, it is worth taking a look to see if it is worth transferring your cash into a Stocks and Shares ISA instead.

“When rates are high, you can get fairly good income and growth from a Cash ISA with little or no risk, but now, it is hard to get the same returns unless you are prepared to take on a little more risk.”

Although Stocks and Shares ISAs do have more risk, they also offer the potential for higher returns over the long term, and now, with stock markets so low, it could be a good time to invest, advises Mr Cole.

“It is also possible to make regular investment contributions; when the markets are falling, you buy more with your payment each month which means that when the market rises again, you can really gain, and of course, the profits you make are completely tax free.”

To find out more about making the most of your tax free allowance, contact Simon Cole at Old Mill Financial Services on 01935 709364 or by emailing or visit

Rachel Mason