In a column within a national newspaper on Sunday (August 12th 2012), the Bank of England governor, who has previously been critical of bankers over excessive pay and poor customer treatment claimed that banks could “learn a thing or two about fair play” from the Olympics; adding that the banking system must be reformed so that it focuses less on making money in the short term and more on building businesses to serve their customer's interests over the longer term.
Sir Mervyn King said within the column: “Yes, for many years, our financial sector sustained the illusion that it was possible to become a millionaire overnight by buying and selling pieces of paper. But we have seen how paper fortunes in financial markets can disappear overnight.
“Things need to change. The Government’s plans to build a wall between banks’ risky trading on one side, and their lending to businesses and families on the other, will help; as will the injection of new competition into our banking system.”
The Bank of England governor went on to say: “The financial sector has done us all a disservice in promoting the belief that massive financial compensation is necessary to motivate individuals” adding that those who volunteered at the Olympics showed that "motivation is more than mere money.”
During his column over the weekend, Sir Mervyn King also called for international cooperation to ease the global economic crisis, saying: “If we have learnt anything from the past fortnight, it is that commitment and hard work over a long period are necessary for eventual success.”
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It has been revealed that in an effort to achieve call targets two years early, HMRC have hired one thousand staff at a cost of £34 million.
The move by the tax authority has been designed to achieve the target of answering ninety percent of calls; and HMRC have also pledged £9 million additional investment this year and up to £25 million during 2013 / 2014.
Previously, the Joint Initiative on HMRC Service Delivery have said that whilst call centre performance had improved significantly, from forty-eight percent of all attempts handled during 2010 / 2011 to seventy-four percent in 2011 / 2012; more needed to be done to provide a better call service to customers – and it is hoped that this new investment will enable this, by drastically reducing call times.
Speaking of the additional investment, HMRC’s chief executive, Lin Homer, said the move will enable the tax authority to make improvements by the end of March 2013 and sustain service levels during the next two-years, rather than wait until 2015 to achieve the target.
Ms Homer, added: “Our contact centres receive around 60 million phone calls a year and how well we operate this service is of huge importance to our customers.
“It is vital that when customers call us for help their call is answered – and in a reasonable time. The feedback we get is that the quality of the advice we give when people get through is good, but we haven’t been answering enough calls.
“I am reprioritising our resources to make this additional investment possible, without impacting our other core customer services.”
For more information, please visit www.milsted-langdon.co.uk
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Yesterday (August 8th 2012), the Bank of England governor, Sir Mervyn King, whilst presenting the central bank’s inflation forecasts, claimed that since the financial crisis the Libor system has stopped working and a fix needs to be found to support existing contracts based on the rate.
Last week the government launched a review into Libor, following the recent high profile cases, in the hope of finding a potential alternative of the rate setting process, which will reform the key interest rate benchmark which is used to help set the price of mortgages and loans.
Speaking during his press conference yesterday, Sir Mervyn King announced the importance of finding an alternative, saying: “What’s become apparent is there is no such thing as the inter bank borrowing rate. The dominant feature in setting inter bank borrowing rates is now the credit risk associated with the potential failure of a bank, and that varies from bank to bank.
“So the idea of having a panel to sort out the inter bank rate no longer makes sense.”
Sir Mervyn King added that the need to find a solution quickly is a must, adding: “Since there is an enormous stock of contracts, getting on for half a trillion dollars in assets which are derivative linked to Libor, then the question is how can you ensure that the Libor system keeps going in order to support that stock of existing contracts”
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Documents filed at Companies House have revealed that the search engine and internet giant, Google, contributed £6 million to the exchequer in 2011 on UK revenues of £395 million.
The latest figures surrounding the corporation tax paid by the company are likely to raise further questions in regards to Google’s tax practices, after it was revealed last year that the UK business paid less than £950,000 of tax on revenues of £2.39 billion.
At the time of the criticism levelled at Google last year, their executive chairman, Eric Schmidt, claimed that the company was obliged to pay the legal minimum in UK tax, saying: “We could pay more tax but we would have to do so voluntarily. There are lots of benefits to being in Britain.
“It's very good for us, but to go back to shareholders and say 'We looked at 200 countries but felt sorry for those British people so we want to pay them more... there is probably some law against doing that.”
Now the latest documents filed at Companies House have revealed that in the six years to the end of 2010, Google paid just £8 million of corporation tax in the UK; whilst in the most recent quarter – to the end of June – Google’s worldwide profits rose by eleven percent to £1.8 billion.
Following the latest figures, a Google spokesperson said: “We comply with all the tax rules in the UK. We make a big contribution to the UK economy by employing over a thousand people, helping hundreds of thousands of businesses to grow online and investing millions supporting new tech businesses in East London.”
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A recent study, which looked at the proportion of total income tax taken in fifty cities, has revealed that some UK cities are paying thirty-one percent more in tax, than at the start of the financial year.
Following the publishing of the results of the survey, it has been revealed that forty-two of the fifty cities involved, saw a rise in the proportion paid in tax, with York seeing the biggest rise – thirty one percent.
At the other end of the scale, Salisbury, Durham and Peterborough were among a handful of cities involved in the survey where the proportion of tax taken fell as income rose.
One of the reasons cited for the slow rise in income tax levels was the increase in people’s personal allowance, which is the amount of money they are allowed to keep before they start paying income tax; with the personal allowance rising between 2007 and 2010 from £5,035 to £6,475.
A spokesperson behind the survey, said of the results: “For the vast majority of taxpayers the effective tax rate fell during the financial crisis.
“The tax bill for someone on a static income of £20,000 will have decreased by about eleven percent over the last three years. Of course, that doesn't reflect the increase in VAT and other indirect taxes.”
They added: “These statistics also show survivor bias of the recession, showing those still working, or self employed or pensioners who are earning enough to pay tax.”
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