Taxman Extends Deadline 
HM Revenue and Customs have announced that taxpayers will now have an extra two days to file their online self-assessment tax returns, after industrial action threatened to disrupt their call centres on January 31st.

HMRC said it will not be issuing penalties to anyone who files their tax return on February 1st or 2nd. Equally, those who have tax to pay will not face any interest on payments made on February 1st or 2nd.

Stephen Banyard, HMRC's acting-director of general personal tax, said: “We have always been very clear that we want the returns - not the penalties. For that reason, we do not want anyone who cannot get through for help and advice on 31 January to be disadvantaged in any way.”

The extension by the tax authority is an acknowledgement that planned strike action by HMRC staff on deadline day will cause shortages, which will in turn have an impact on taxpayers who have queries about their tax returns.

Exchequer secretary to the Treasury, David Guake, said: “This strike could have caused thousands of people to incur fines, so I am pleased that HMRC has taken this common sense approach.

“The Government does not want anyone trying to file their tax return on time to be unfairly penalised because they were unable to get through for help and advice on deadline day.”

HMRC had previously announced that taxpayers who could not get through to the call centres would have to write to their tax office pleading that they had a "reasonable excuse" not to have filed their tax return.

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Raise Tax Threshold Further and Faster 
Deputy Prime Minister, Nick Clegg, has urged the coalition government to go “further and faster” in raising the level at which people start paying income tax, to £10,000 a year.

Currently, the level at which earners start paying income tax is £7,475, with the government looking to raise it to £8,105 this year; with the promise of raising the threshold to £10,000 by the next election which is set for 2015.

However, Nick Clegg has argued that many families are already at financial boiling point and need more relief.

During a speech to the Resolution Foundation think tank, Mr Clegg will call for urgent reforms to the tax system so that it rewards ordinary taxpayers and helps drive growth.

Mr Clegg is set to tell the think tank: “These families cannot be made to wait. Household budgets are approaching a state of emergency, and the Government needs a rapid response.

“These families have seen their earnings in relative decline for a decade, compared to those at the top. That has accelerated since 2008, with lower real wages and fewer hours at work.

“Every politician now has a simple choice: do you support a tax system that rewards the hard-working many? Or do you back taxes that favour the wealthy few?

"There is now an urgent need to give families more help, an urgent need to rebalance our tax system so it rewards work and encourages ordinary people to drive growth."

Nick Clegg’s call to the government comes following news that the economy shrank by 0.2 per cent in the last three months of 2011.

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UK Could Save £4 Billion a Year 
A study by Open Europe has suggested that Britain could save over £4 billion a year by taking back control from the European Union for the country’s poorest regions.

The study has found that during a seven year period, which ends next year, Britain will have paid almost £30 billion into the EU’s ‘structural and cohesion funds’ targeted at Europe’s poorest areas; but they’ll have received under £9 billion back.

According to the study, for every pound which the Treasury contributed, seventy pence is spent elsewhere in Europe, twenty-five pence returns to the same region and five pence is redistributed between the richer and poorer regions in Britain.

Whilst the study concludes that there is a strong case for richer EU countries to continue to subsidise poorer ones, it also states that large savings could be made if Britain managed its own regional policy.

The author of the study, Pawel Swidlicki, has called for the government to revive a previous British demand for reform by which EU members would pay for their own regional funding, with Brussels spending limited to countries that have less than ninety percent of the European average income.

Mr Swidlicki said: “This could save the UK up to £4.2bn. If this money was re-invested in the UK regions, along with the amount that is currently spent via the EU, the receipts of each UK region should increase by around forty-five percent compared to the amount of grants they currently get.

"The coalition should match the pledge made by the previous Labour government and seek to bring regional policy back to the UK. The economic, social and democratic arguments clearly point in favour of this policy option."

The European Commission, which administers the EU regional policy has challenged Open Europe’s figures, saying: “We don't know what these calculations are based on.

"Last year 271 regions, including 150 in richer countries, signed a letter supporting EU funding amid concern that national policies would see cuts to spending. Having an EU policy is crucial to realise a consistent regional policy of getting investment into poorer areas.”

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UK Debt Passes £1 Trillion Mark 
According to the latest figures from the Office of National Statistics, the government’s debt has passed the £1 trillion barrier for the first time; despite a bigger than expected fall in borrowing throughout December.

The latest figures, which are officially released on Wednesday, show public sector borrowing – excluding financial interventions such as bank bailouts – fell £2.2 billion to £13.7 billion last month, a bigger fall than the City’s estimate of £14.9 billion.

The bigger than expected fall in government borrowing during December was partly offset by a £1.3 billion increase in estimates for borrowing between April and November after local government spending was revised upwards.

However, the report shows that the fall still wasn’t enough, with the net debt rising to £1,003.9 billion (64.2% of the GDP) and the highest since records began in 1993.

Despite the figures increasing, the Chancellor, George Osborne, is still on track to hit a target set by the Office for Budget Responsibility to reduce the UK’s borrowing to £127 billion in the financial years – despite fears the UK is on the brink of recession.

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Britain Will Pay Tobin Tax 
Britain will end up paying the European’s financial transaction tax, whether it joins the scheme or not, the bloc’s top tax official has warned.

Algirdas Semeta, the bloc’s tax commissioner has said that London’s continued resistance to agree to an EU-wide Tobin tax would result in the City paying money to continental tax collectors, without Britain benefiting from the proceeds.

Mr Semeta added: “The UK would lose a lot if other members decide to move ahead with a financial transactions tax.

“Because of its design, Britain will be subject to the tax, but at the same time, it will not receive any money from it.”

He also argued that a financial transaction tax agreed by all 27 EU members could help shore up the UK’s public finances by reducing its annual contribution to the EU’s €140bn-a-year operating budget; saying: “If you take into account the size of the financial sector in the UK, the financial transaction tax would collect significant amounts of revenues, part of which would go into the EU budget.

“This would reduce the UK’s contribution to the budget, which would help reduce their public deficit.”

London, which is able to veto EU tax proposals has stood firm against plans to introduce the tax, yet Brussels look set to impose a tax in much of the rest of the EU and it’s thought that such a levy could use the “residence principal” which taxes any trade by a company that is located within the tax area.

This would mean Britain would be indirectly exposed to at least some of the financial transaction tax’s effects; although it could also benefit from an exodus from other European financial centres.

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