Because of mismatches between the tax systems of the 27 EU member states, problems such as double taxation and legal or administrative uncertainty can arise when venture capital is invested across national borders.
The aim of the public consultation is to find concrete examples of direct tax problems and to assess the impact of these problems in terms of additional costs to investors and SMEs in the EU.
The Commission is also seeking suggestions from respondents on feasible solutions to address any such problems. On this basis, the Commission will be able to decide if there is a need for EU-level solutions to remedy the problems and develop the most appropriate policy response by 2013 that will eliminate any obstacles, while at the same time preventing tax avoidance and evasion.
The Commission has invited all interested parties, including individual citizens, businesses and business organisations, tax administrations and tax professionals in academia, to provide their views on this matter by 5 November 2012.
Algirdas Šemeta, Commissioner for Taxation, Customs, Anti-fraud and Audit, said: "Venture capital is an essential source of financing for companies, in particular innovative start-up SMEs facing the costs of developing know-how.
“SMEs are the backbone of the EU's economy and help to generate economic growth and new jobs. It is therefore the collective responsibility of the Commission and Member States to find solutions to tax obstacles that hinder cross-border venture capital within the EU."
For more information, please visit www.milsted-langdon.co.uk
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A leading think-tank has suggested that delaying the austerity programme by three years would put 200,000 people back in work and raise the economic growth by £239 billion over a decade.
The National Institute of Economic and Social Research, who published its economic analysis earlier this week, has slashed its growth forecast for the year from zero percent to a contraction of 0.5 percent; although they have suggested that if the government had delayed its austerity programme for this year, the economy would have grown by 1.2 percent.
The latest suggestions from the National Institute of Economic and Social Research is set to add further pressure on the government to respond to the double-dip recession with a new growth strategy; and the think-tank have suggested that even if the government are not prepared to delay their austerity programme, they should look to loosen its debt reduction plans and borrow more to pay for key infrastructure projects.
A spokesperson for the think-tank added: “It remains the case that there is scope for a less aggressive path of fiscal tightening.”
The warnings from the think-tank come after the Bank of England opted to keep interests rates on hold at 0.5 percent and leave the quantitative easing programme unchanged for August.
For more information, please visit www.milsted-langdon.co.uk
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HMRC are being pushed by the Personal Finance Society to clarify when it would consider that a client review has strayed into discretionary investment advice, which could trigger a VAT charge.
In March, HMRC published their RDR guidance on VAT liability, which states that where the customer seeks the arrangement of a retail investment product and the adviser carries out a six-step advice process, advice will be VAT exempt.
The guidance goes on to state that if ongoing services are agreed with the client after a product sale, firms will continue to be exempt. But if there is no evidence or products being arranged, or one or more stages are contracted for under a separate agreement, VAT will be due.
According to the Personal Finance Society, this provides a grey area between regular advice reviews – which do not incur VAT – and a discretionary service, which is likely to incur VAT.
In a bid to clarify the situation, HMRC have revealed that they are due to issue guidance on the VAT treatment of discretionary services following a European Court of Justice’s ruling; with a HMRC spokesperson saying: “The recent ECJ judgment has provided further guidance on the correct VAT treatment of discretionary investment management services and HMRC is reviewing the current UK treatment in light of this.
“Members of HMRC’s finance liaison group will be invited to a meeting in September to discuss the implications of the judgment and any possible changes to the UK VAT treatment going forwards.”
For more information, please visit www.milsted-langdon.co.uk
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A new scheme designed to prompt banks and other lenders to make more money available to businesses and homeowners has come into effect from today.
The “Funding for Lending” scheme – a joint venture by the Treasury and the Bank of England - is designed to incentivise banks and building societies to boost their lending to UK households and non-financial companies.
As part of the scheme commercial banks will be able to exchange collateral, such as existing loans for pieces of paper known as Treasury bills, on which they will pay an interest rate of 0.25 percent.
Banks and other lenders will then be able to use these bills as backing with which to borrow cash cheaply on the wholesale markets, money they can then lend onto homes and firms.
Unveiling the scheme, the Chancellor George Osborne confirmed that it would ultimately supersede the £20 billion National Loan Guarantee Scheme, which was launched earlier this year in a bid to boost lending to businesses.
Mr Osborne, said: “The National Loan Guarantee Scheme has made a real difference, with over 16,000 cheaper loans worth over £2.5bn already offered to businesses across the UK.
“In many cases, the money saved has meant an extra person employed who otherwise still might be looking for work.”
For more information, please visit www.milsted-langdon.co.uk
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It was revealed yesterday (July 30th 2012) that the government has paid out over £1 million in rewards for information on tax cheats since the start of the financial crisis.
According to the figures received by an investigative website, HMRC paid out nearly £400,000 last year as part of little known “bounty payments” for reporting on tax evasion – with the figures rising by over a fifth from the previous financial year.
The reported figures reveal that the value paid for information typically varies from £50 to tens of thousands of pounds, depending on how much tax was recouped as a result of the information; and one of the largest payments is reported to have been paid four years ago when HMRC paid £100,000 for a list of secret offshore accounts held by Britons.
Following the release of the figures, a spokesperson for HMRC described the annual totals as “lumpy” claiming that a few big rewards in a year were able to skew the figures.
The spokesperson added: “If we are recovering many millions of pounds in tax, the payment reflects that.” However they added that payments are at HMRC’s discretion, and the rewards depend on “the value of the information and the quality of the result”, he added, although they are not a fixed percentage of the tax recouped.”
For more information, please visit www.milsted-langdon.co.uk
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