Milsted Langdon LLP2013-05-20T03:35:20ZMilsted Langdon LLPCopyright 2013, Milsted Langdon LLPSPHPBLOGPleasant Surprise Or Unwelcome Shock Having recalculated earnings in its annual PAYE End of Year Reconciliation process for 2012-13, the department has now begun the laborious task of contacting the people who either under or over paid. However, as there are so many people to speak to, some taxpayers will not find out whether they are due a refund or have to fork out more money until October.
Of the 5.5 million people, some three and a half million are due a refund of between £350 and £500, while the balance will be asked to make up an average shortfall of between £400 and £500, although the taxman has said he is happy to wait until the 2014-15 tax year for it to be repaid.
A spokesperson for HMRC said that around 85 per cent of PAYE taxpayers pay the right amount of tax throughout the year but if their circumstances change during the 12 months, such as if they move jobs, then a recalculation has to be made.
He added that this is the normal process that the PAYE system has used since it was set up some 70 years ago. Of course, the hope is that with the introduction of reporting payroll information in real time, commonly called RTI, which started for most employers this April, these recalculations should be a thing of the past. It could be interesting to see whether the taxman needs to get in touch this time next year.
]]>http://www.milsted-langdon.co.uk/blog/index.php?entry=entry130517-1050352013-05-17T00:00:00Z2013-05-17T00:00:00ZRecovery In Sight The Bank’s Governor Sir Mervyn King said that inflation should drop to its target of 2 per cent within two years, whereas the previous prediction was for inflation to fall to 2.3 per cent in the same period.
As a knock-on, economic growth is likely to be higher than 1 per cent, which is up from the Bank’s previous prediction of 0.9 per cent, although the underlining picture remains “weak by historical standards”.
Sir Mervyn said he was happy to be able to announce the news as his parting shot, as he hands over the Governor’s mantle to Canadian Mark Carney in just over six weeks.
He also supported Chancellor George Osborne’s economic strategy, saying that the UK “would be well into recovery” had global growth been around trend and attacked the International Monetary Fund’s “quibbling” over the Chancellor’s austerity programme.
Meanwhile data from the Office for National Statistics (ONS) showed that while unemployment rose by 15,000 in the first quarter of 2013 to 2.52 million, the number of people claiming Jobseekers’ Allowance fell by 7,300 last month to 1.52 million.
In addition, average earnings, excluding bonuses, grew by just 0.8 per cent over the year, which is the lowest rate of increase since the ONS began reporting the figure in this current format 12 years ago.
Sir Mervyn also commented on unemployment and revealed that the Bank expects it to fall “by only a little” from the current level of 7.8 per cent over the coming year.
]]>http://www.milsted-langdon.co.uk/blog/index.php?entry=entry130516-1130332013-05-16T00:00:00Z2013-05-16T00:00:00ZMore Tax Evaders ‘Named And Shamed’ The original list HMRC, which was published in February, caused an outcry as it focused on small businesses and individuals who between them only owed £1.45m in unpaid taxes and fines, while corporations were perceived as ‘getting away with’ multi-millions.
This time the firms and people on the list owe £4.6m and there are some bigger names including, sending a clear warning that the taxman will come after anyone who deliberately evades tax.
The department is allowed to publish the names under the Finance Act 2009 and is part of HMRC’s approach to combating tax evasion and non-compliance.
Jennie Granger, Director General for Enforcement and Compliance, said that the department will publish the names of tax cheats every quarter and added that anyone who is thinking about avoiding their responsibilities should therefore consider the consequences before they refuse to tell HMRC about their full tax liability.
According to the taxman, publishing these names encourages defaulters to make a full and prompt disclosure and cooperate with HMRC to avoid being named, as all the named defaulters have exhausted the appeals process.
The information may be published once the taxman has carried out an investigation and the person has been charged one or more penalties for deliberate defaults on tax of over £25,000.
However, the department says that information will not be published if the person earns the maximum reduction of the penalties by fully disclosing details of the defaults – the implication being that those who co-operate with the department could retain anonymity.
]]>http://www.milsted-langdon.co.uk/blog/index.php?entry=entry130515-1127062013-05-15T00:00:00Z2013-05-15T00:00:00ZRise in Housing Demand The latest RICS Residential Market Survey published today (May 14th) suggests that the Government’s Help to Buy scheme has begun to make an impact on the housing market.
Last month, new buyer enquiries rose to their highest level since 2009, with 25 per cent more chartered surveyors reporting that demand for property rose rather than fell.
The jump in enquiries last month, up from 13 per cent more in March, strongly suggests that along with the existing Funding for Lending scheme, Help to Buy is attracting interest, even if the mortgage guarantee element of the product is not due to come into effect until next year.
Help to Buy was announced by the Chancellor, George Osborne, in his March Budget. Under the scheme, the Government committed £3.5bn over the next three years to shared equity loans for new-build homes, allowing buyers to purchase them with a 5 per cent deposit.
The scheme will also guarantee £130bn of mortgages from 2014 for three years, allowing banks to provide more loans to people who cannot save big deposits.
The RICS survey went on to say that, as demand increased so did supply, with new instructions to sell rising in April to a net balance of 8 per cent. With not enough housing to meet increased demand, prices are beginning to improve, and the survey recorded its first positive reading for house prices since June 2010, albeit only marginally, at 1 per cent.
In addition, other good news for the housing market came from the Halifax building society, which said last week that prices had increased by 1.1 per cent in April from the month before, making it the strongest growth since last November.
]]>http://www.milsted-langdon.co.uk/blog/index.php?entry=entry130514-1125182013-05-14T00:00:00Z2013-05-14T00:00:00ZSME Report Gets Warm Reception In the report, the peer says that expanding the start-up loan scheme and opening a further £230bn worth of government contracts to micro businesses will help thousands of new firms get off the ground, boost growth and transform the economy.
In this, his second report on expanding the smallest businesses with fewer than 10 employees, which make up 95 per cent of businesses in the UK, Lord Young recommends removing the age cap, currently set at 30, for start–up loans and providing a greater role for business schools in their local economies.
Lord Young also wants to see legislation introduced to abolish pre-qualification questionnaires on contracts under £200,000 and the setting up of “single market” principles that suppliers can expect when doing business with the public sector.
Various business organisations including the Confederation of British Industries (CBI) and the Federation of Small Businesses (FSB) have welcomed the report.
The CBI said that Lord Young rightly identifies that the Government needs to earmark funding to effectively market existing finance and support schemes, as most firms simply do not know what is available, so the new Business Bank will play a crucial role in raising awareness.
The group also supports the recommendation to open up more government contracts to smaller firms by cutting out the requirement for them to complete a pre-qualifying questionnaire, as most smaller firms do not have the capacity to handle this.
However, the FSB questioned whether the schemes were capable of fundamentally changing the small business landscape, and said they might add further complexity to an already crowded business support market.
]]>http://www.milsted-langdon.co.uk/blog/index.php?entry=entry130513-1135122013-05-13T00:00:00Z2013-05-13T00:00:00ZMore Under The Microscope Totalling 400 gigabytes, which equates to hundreds of lorry loads of printed material, the data showed extensive use of complex offshore structures to conceal assets in havens around the world, including the Cayman Islands, which has just signed a tax disclosure treaty with the UK, Singapore and the Cook Islands.
Having sifted through the information, the department has now identified more than 100 people who are benefitting from these structures, some of whom are already under the taxman’s scrutiny.
The Treasury is currently working in collaboration with American and Australian tax authorities in the biggest ever cross-border tax evasion investigation, and has warned that the alleged evaders may be publicly named and shamed if they fail to come clean and explain their tax affairs.
Snippets of the data were first offered to HMRC in 2009 but the organisation did not receive the bulk of it until the year after and investigators at the department have been working on it ever since. It is not known whether the taxman paid for the information, but there is evidence that other data has been paid for.
However HMRC received the information it will lead to what could be the largest tax investigation in history, particularly with three major tax agencies collaborating and pooling data.
However, the department insists that it is merely investigating the information it has received and that the arrangements may be perfectly legitimate and already declared. What it is looking for is any offshore structure that is designed to illegally hide assets and income.
]]>http://www.milsted-langdon.co.uk/blog/index.php?entry=entry130510-1152302013-05-10T00:00:00Z2013-05-10T00:00:00ZQueen Outlines New Legislation One of the most important was the announcement of a Pensions Bill, which will introduce a single-tier pension of £144 a week and will bring forward to 2026 the date at which the retirement ages rises to 67.
The Bill also makes provision to continually review the retirement age in light of the increase in people's life expectancy and will make it a legal requirement for the pensions regulator to consider minimising the economic impact pension provision has on a company that provides it for its employees.
Also included in the speech were a Deregulation Bill designed to axe red tape for businesses, an Intellectual Property Bill, a Water Bill to unleash competition and an exemption from health and safety laws for the self-employed whose work activities pose no potential risk.
The speech also promised to deliver a raft of measures announced in the Chancellor’s March Budget, from the £2,000 National Insurance allowance for small firms to the Help to Build scheme.
However, many business leaders were less than impressed with the Speech, with the Chief Executive of the Forum o Private Business calling it the “most insignificant Queen’s Speech for business for a number of years”.
Having said that, head of the British Chamber of Commerce, John Longworth, said that ministers seem to have got the message from business that when it comes to new legislation, “less is more”.
While the Director General of the IoD, Simon Walker, said that the Deregulation Bill is a missed opportunity, which will do little to cut back red tape for employers and nothing to tackle the problem of EU regulation.
]]>http://www.milsted-langdon.co.uk/blog/index.php?entry=entry130509-1140202013-05-09T00:00:00Z2013-05-09T00:00:00ZUK Car Sales Buck European Trend Car sales have been rising steadily in the UK over the past year, even when the economy has not been performing so well, which is mainly due to attractive finance deals and wider market factors making car buying favourable to motorists.
The increase in sales has also been supported by the private sector, where sales were up by 32.3 per cent in the month. However, the rest of Europe has not performed so well, with a 10 per cent drop recorded across all the other European Unions countries during March, marking the 18th consecutive month of decline.
The SMMT revised up its full-year sales forecast to 2.106 million units, a 3 per cent increase on 2012 volumes. In January it predicted full-year sales of 2.057 million.
Car sales in the UK have also been boosted by high fuel prices, which have encouraged motorists to buy more fuel-efficient cars to save money on running costs.
This approach was evident in April's best-selling models, all small cars, with Ford's Fiesta coming top, with 8,083 being sold in April, followed by Vauxhall's Corsa and then Ford's Focus, which sold 5,944.
The industry body also said that petrol-fuelled cars have seen their market share climb in the first four months of 2013, supported by increased demand for small cars.
The mini segment of the industry continued to post the best growth in April while the supermini remained the largest segment, the data confirmed.
]]>http://www.milsted-langdon.co.uk/blog/index.php?entry=entry130508-1107042013-05-08T00:00:00Z2013-05-08T00:00:00ZBanks Responsible for Sluggish Growth Mr Tomlinson, who has been given the title of “entrepreneur in residence” at the Department for Business, Innovation and Skills (BIS), said that the bank’s behaviour has been endangering small firms and questions how we can have allowed this to happen.
The UK’s four biggest banks, which together make up 85 per cent of the lending to small firms “are not interested in lending”, according to the entrepreneur, who has built up a £500m business empire since the age of 23.
With his first bank loan, worth around £1m at today’s rates, Mr Tomlinson bought his first care home and then went on to diversify into motor racing, software, construction and chemicals through his LNT group.
He says that he had to invest £15million of his own money in the group in 2009 after RBS reduced its loan term because the construction sector was deemed a risk. LNT completed a £100million refinancing deal in April with five banks, including RBS, but that it had taken nearly three years to arrange.
However, he has praised some of the Government’s measures aimed at making finance more accessible to smaller firms, such as the Bank of England’s Funding for Lending Scheme (FLS) and the plan for the state-owned Business Bank.
In reply to Mr Tomlinson’s remarks, the British Bankers’ Association said that the issue is about small firms not applying for finance, not that the banks are not lending. However, the entrepreneur said that firms are not applying for finance, as they believe they will be turned down.
]]>http://www.milsted-langdon.co.uk/blog/index.php?entry=entry130507-1130582013-05-07T00:00:00Z2013-05-07T00:00:00ZECB Takes Interest Rate To Historic Low It was the first time in 10 months that the Bank has cut the rate and was in response to a drop in Eurozone inflation, which is well below its target level.
President of the ECB Mario Draghi also promised to provide as much liquidity as the banks in the single-currency blog need well into next year and to help smaller companies get access to credit.
In addition, Mr Draghi said that the Bank is prepared to cut interest rates even lower, should the economic conditions in the Eurozone make it necessary; adding that the Bank is “technically ready” for negative deposit rates.
The cut in interest rates lowers the costs for troubled banks that have taken emergency loans from the ECB, and could help them repair their finances so they can improve lending. However, it is not certain that the cut will have much of an impact.
One consequence however has been that yields on 10-year German Bunds fell to an all-time low of 1.16 per cent within hours of the announcement, signalling the risk of a deflationary crisis and a slide towards outright depression.
The ECB has also been criticised for doing too little, too late, with one commentator remarking that it is like opening the windows in a convertible when the top is down.
However, Mr Draghi is convinced that the Bank’s forecast that economic recovery will take hold later this year is correct.
