Wandisco Update and Budget Postscript

I received an email yesterday on the subject of Wandisco (WAND). It was from someone using a fictitious name and an invalid email address so you can judge for yourself how accurate this is likely to be. This is what it said: “The inside scoop at WanDisco is that the European Sales Director has done a total number on them. Multiple huge sales reported, complete with purchase orders (which they now suspect may have been faked). Such little financial governance from the board that while they were lauding this guy as an amazing success, no one seemed to notice that the money hadn’t actually arrived. How out of control must a company be to not notice millions of bucks missing from the accounts?”

Is that credible? I don’t think so. See my previous comments in this blog post: https://roliscon.blog/2023/03/14/4704/

Were these “purchase orders” or simply “letters of intent”? In such a small company it is certainly incredible that the CEO and CFO were not familiar with the details of these orders and were not monitoring the likely cash flows. My previous comments are still relevant.

As regards the budget, Labour are apparently unhappy with the dropping of the lifetime pension allowance and will reverse it given the chance. This was always an iniquitous piece of tax legislation, effectively taxing money at high rates that was previously saved by prudent employees. The £1 million lifetime allowance was not enough to provide a comfortable lifestyle in retirement for previous high-earners. What guaranteed interest rate could they achieve? An annuity of £1 million would only likely mean an income of £60,000 p.a. for life which with inflation rapidly eroding the value is not a great proposition.

For a senior medical consultant working for the NHS the low lifetime allowance was certainly a great incentive to retire early to avoid breaching the £1 million lifetime allowance.

But another complaint is that the scrapping of the lifetime allowance and increase in the annual allowance to £60,000 will enable people to avoid Inheritance Tax. And why not? Inheritance tax is a dubious tax to start with as it taxes money previously taxed as income – effectively double taxation. It’s a tax based more on the principle of screwing as much as tolerable from personal savings rather than an equitable scheme to relieve people of what they can afford to contribute.

The whole personal taxation system needs reforming to make it more rational and simpler. There are so many loopholes and complications that making simple changes can lead to unintended consequences as seen with the latest changes.

The lifetime allowance was introduced to prevent the abuse of high tax relief on pension contributions. Scrapping the limit seems to be an ill-thought through reaction to problems in the NHS. The Labour Party could be right in that respect.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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