Working people

I was with a client last week. She's a single mum who runs her own business. Sometimes she works 60 hours a week. She's built the business up from scratch. Nobody helped her. She's not from a weathly background and everything she's got, she sweated for.

She's a very shrewd business woman and she doesn't like traditional pension savings schemes. Because she's financially savvy, she reckons that she can outperform any pension fund and so has used her earnings to purchase two buy to lets as her retirement plan.

Now according to the Prime Minister and the Labour Party, she's not a working person and so deserves to pay more tax.

And she's not alone in using buy to let as a retirement strategy. With MTD for landlords coming, we recently did an analysis of our clients and about a third of them, ranging from bricklayers to dentists, own rental property.

None of them will qualify as working people under the Prime Minister's definition and so are fair game for tax rises in the Budget this week.

I think that the furore around the Prime Minister and the Labour Party's definition of working people shows just how out of touch career politicians are with how the modern economy works. No wonder tax policy rarely achieves what the politicians think it will!