Moody’s Warn UK on Credit Rating 
The ratings agency, Moody’s, has warned the UK its credit rating may be cut in future, potentially increasing borrowing cuts.

Following concerns about the possible impact of the Eurozone crisis on the UK’s growth prospect, the US agency have put the UK on “negative outlook”, implying there is a thirty percent change the UK could lose its AAA credit rating within the next eighteen months.

Moody’s said in a statement: “The increased uncertainty regarding the pace of fiscal consolidation in the UK due to materially weaker growth prospects over the next few years, with risks skewed to the downside.

“Any further abrupt economic or fiscal deterioration would put into question the government's ability to place the debt burden on a downward trajectory by fiscal year 2015-16.

“Although the UK is outside the Euro area, the high risk of further shocks within the currency union are exerting negative pressure on the UK's AAA rating given the country's trade and financial links with the Euro area.

“Overall, Moody's believes that the considerable uncertainty over the prospects for institutional reform in the Euro area and the region's weak macroeconomic outlook will continue to weigh on already fragile market confidence across Europe.”

Other European countries including Austria and France have also been warned about the future of their credit rating; whilst Italy, Portugal and Spain have had their ratings lowered.


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UK To Avoid Double-Dip Recession 
The Confederation of British Industry (CBI) has forecast that the UK will narrowly avoid a double dip recession during 2012; although they have announced that the fate of the country’s economic future is closely tied to the Eurozone.

In their latest economic forecast, the CBI have lowered their estimates of British growth from 1.2 percent predicted in November 2011 to 0.9 percent, forecasting a fragile 0.2 percent growth during the first quarter of 2012.

The CBI say the latest figures are in response to the economic contraction recorded during the last three months of 2011; with CBI’s general director, John Cridland, saying: “Economic conditions will continue to be tough, especially in the first half of the year, and the UK recovery will depend on the successful resolution of the Eurozone crisis.

“Although risks remain we expect growth this year, improving modestly in 2013, primarily driven by positive net trade and business investment.

“The pressure on household incomes will also ease slightly in the second half of this year as inflation falls, resulting in a slight increase in consumer spending. But weak wage growth and high levels of unemployment will continue to be a brake on household spending.”

The CBI have predicted that during the next twelve months growth will pick up, forecasting a 0.6 percent increase in the third quarter and a 0.5 percent growth in the final quarter; whilst also predicted a two percent growth during 2013.


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Cameron to Consider Tax Breaks for Home Help 
The Prime Minister, David Cameron, is considering introducing tax break to people who hire cleaning or other household services, in a bid to help working families who are financially struggling.

A similar scheme is currently in place for working families who employ a nanny through Ofsted. Under the current scheme, families with an Ofsted registered family are able to receive a childcare voucher from their employer and reduce their tax.

With Mr. Cameron under growing pressure to draw up plans to help families, who are struggling with the most severe squeeze on their disposable income for a generation, it is thought that Cameron will consider extending the scheme to include home help, in a similar scheme currently used in Sweden.

Speaking at the Nordic-Baltic summit in Stockholm, Cameron said: “What you do in Sweden in terms of tax help and tax relief, not so much on child care but on other things that help women go out to work, I thought that was a very interesting idea that I want to look at further.

“We’ve made some big steps forward on the child care agenda, helping parents of two, three and four year-olds with nursery care.

“We’ve also made some big steps forward in terms of parental leave, but this is another agenda that’s worth looking at. Clearly Sweden has some interesting ideas in this area.”

It is hoped that the introduction of the scheme in the UK would reduce black market and cash-in-hand domestic work, by making it cheaper to employ home help officially.

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HMRC Have No Regrets Over Redknapp Case 
Following the acquittal of Harry Redknapp and Milan Mandaric in a high profile tax evasion court case, the HMRC have said that they have “no regrets” about taking the investigation to court.

During the last five years, an £8 million investigation has focused on an offshore bank account, set up by Mr. Redknapp in the name of his dog, which received money from Mr. Mandaric.

However, the jury accepted Redknapp’s explanation that the payments made into the account were nothing to do with bonuses he’d been promised from the sale of players; but were instead “seed money” loaned by Mandaric, which had been intended for investments.

Following the court decision yesterday, Redknapp told waiting reporters that: “It really has been a nightmare. I've got to be honest. It's been five years and this is a case that should never have come to court because it's unbelievable, really.”

Whilst the decision will come as a blow to the HMRC, which has a high conviction rate in regard to tax evasion, the assistant director of criminal investigations at HMRC, Chris Martin, said he had no regrets, and warned others using offshore tax havens.

“We have no regrets about pursuing this case because it was vitally important that the facts were put before a jury for their consideration.

“We accept the verdict of the jury but I would like to remind those who are evading tax by using offshore tax havens that it always makes sense to come forward and talk to us before we come to talk to you.”

It’s also been reported that HMRC intend to step up the number of criminal prosecutions it brings from around 100 to 500 per year, and they’ve also been given £900 million by the government to clamp down on tax avoidance and evasion.

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Liechtenstein Tax Disclosure Agreement Extended 
The UK government have extended the tax agreement with Liechtenstein, giving British taxpayers an extra year to come clean about any tax they owe.

Under the Liechtenstein Disclosure Facility, British taxpayers with bank accounts in the tiny European principality are able to settle their tax liabilities in favourable terms. Those who come forward under the agreement could face penalties amounting to just 10% of the tax they’ve evaded; although they will still have to pay back tax and interest, going back up to 10 years.

Taxpayers who fail to volunteer their actions face much tougher penalties, with fines amounting up to 200% of their unpaid tax and in the most serious cases prosecution.

The LDF was due to end at the end of March 2015, but because of strong demand, the disclosure facility is now set to run until April 5th 2016 – with HMRC claiming that since the LDF came into affect in 2009, 2,000 people have so far come forward, which has exceeded expectations.

The LDF has also been incorporated into a double taxation agreement between the two governments to ensure that taxpayers aren’t taxed twice on their income.

Exchequer Secretary, David Gauke, said: “Today's agreement takes that commitment forward by providing greater transparency and certainty to the taxpayers of both our countries about how their incomes and gains will be taxed."


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