Today, tax inspectors have begun an all mighty rampage in London, where their target are restaurants, they will then move onto restaurants in Scotland, followed by the North West.
The HMRC has a goal of collecting an additional £7 billion in tax a year from businesses and individuals by 2014.
Any clampdown on tax evasion is welcome - tax evaders can gain an unfair business advantage, allowing them to undercut and even drive out of business those who pay their taxes in full.
However, it is the way in which tax inspectors are orchestrating the clampdowns that is a huge cause for concern for all money-based businesses, such as hairdressers, bars, hotels and restaurants.
A restaurant in Bristol reported how a coach load of 20 tax inspectors arrived unexpectedly, carried out there inspection and closed the restaurant down there and then.
Tax must be paid but the country also needs jobs and growth, especially at this time of economic downfall. Raids and investigations that are handled poorly can lead to otherwise viable businesses closing down.
The HMRC were given £900 million in last year’s spending review, and it is hoped that this will provide them with the extra resources they need.
For more information, please visit www.milsted-langdon.co.uk
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Mervyn King has cast a grey cloud over the future prospects of the UK interest rate. After two years of historic lows, the Bank of England Governor has sent out a warning to families that they should prepare for an even tighter squeeze on their finances, which has led experts to believe that an interest rate rise is imminent in order to halt the “volatile” inflation rate.
It is expected that higher borrowing costs will be a major problem for home owners who have been led to believe that monthly mortgage payments would stay low for many years ahead. A rise to the interest rate would also mean borrowers immediately being hit hard, whilst the rise would come as a relief to savers.
Until now, Mervyn King has consistently urged that an interest rate rise should be resisted as he believes an early rate rise could plunge the economy back into recession.
The Bank has predicted that the UK inflation rate could hit as high as five percent by the end of this year. The soaring inflation rate is thought to be the reason behind the Governors warning to households and businesses, as the balance of opinion to an early increase to the interest rate has been tilted.
Mervyn King said: “There is no doubt that we are facing a difficult time ahead with a slow and prolonged adjustment to the consequences of the banking and financial crisis. There is a good chance that, if utility prices rise further later in the year, inflation will reach 5 per cent before falling back through 2012 and into 2013.”
If inflation does reach five percent, it would mean being more than double the Governments target. Inflation is now being described as “volatile”, with the Bank of England’s quarterly inflation report notes saying: “There is a great deal of uncertainty about the outlook for inflation.”
For more information, please visit www.milsted-langdon.co.uk
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Sir Alan Sugar seems to find it easy to sack his potential employees, and for businesses it is also about to get a whole lot easier. The Government’s current war on red tape has meant that sacked workers who sue their employers for discrimination could have their compensation cut, making sackings within businesses easier and less costly.
In a bid to abolish unnecessary regulations, the Government launched the Help Us Cut Red Tape scheme, where businesses are able to voice their opinion to the Government on the regulations that are the most timely and costly for businesses.
Business groups told ministers that the rules on having to continue to pay workers for weeks after them being sacked places a burden on companies who are already trying to cut costs urgently, which has led to the sacking in the first place.
The Government’s on-going review of employment rules has also led ministers to be concerned that the prospect of large payouts for unfair dismissal on the grounds of discrimination is encouraging unfounded claims from workers.
The Liberal Democrat employment minister, Ed Davey, will today announce plans to ensure Britain has flexible labour markets, where employers can hire and fire staff more easily.
It is expected that the rules extending public sector terms and conditions to the private sector may also be overhauled. The limit on firms looking to sack large numbers of staff is also expected to be relaxed.
The on-going review on employment rules will also look at the Transfer of Undertakings (Protection of Employment) or Tupe rules, which administrate workers’ employment when one company takes on the work of a public sector body or takes over another company.
For more information, please visit www.milsted-langdon.co.uk
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The finger of blame is once again being pointed towards the banks, this time for house prices being at a 21 month low. In a survey released today by the Royal Institution of Chartered Surveyors, estate agents warn that the decline in the housing market is due to the banks refusing to lend to home buyers.
According to figures from Halifax, house prices fell at their fastest rate for 18 months during April. The average cost of a home fell to 1.4% during April to £160,395, which is the lowest level since July 2009.
Geoffrey Holden, a RICS member based in East Sussex, said: “There is a continuing shortage of mortgage funds. Lenders are extremely reluctant to provide funds, making purchases difficult.”
According to the survey, the future for house prices remains bleak with 18 per cent more estate agents expecting house prices to fall rather than rise in the next three months.
Michael Newey, a spokesman for RICS, said: “Activity still remains subdued and it is difficult to see it picking up materially over the coming months.”
The Halifax group believe the decline is due to the ever-weakening consumer confidence and the economic downfall putting downward pressure on house prices.
Halifax housing economist Martin Ellis saw the future for housing prices in a more positive light, saying: "Signs of a modest tightening in housing market conditions, a relatively low burden of servicing mortgage debt and an increase in the number of people in employment are all likely to be providing support for house prices, curbing the pace of decline."
The figured from Halifax contrasted with figures released by Nationwide for April, which revealed that house prices had dropped by just 0.2% and had remained more or less unchanged.
For more information, please visit www.milsted-langdon.co.uk
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The Government has published a guideline for employers about the new rules regarding agency workers employment rights. The rules, which will come in affect in October, will require agency workers to have equal employment rights once they have been working for the same employer for 12 weeks.
The Coalition’s guidelines aims to help businesses to comply with the new regulations that will see agency workers being given the same working and employment conditions as those employed directly by the employer, after completing a 12-week period of work for the same employer.
The equal rights were previously agreed by the Labour Government and have since been reviewed by the Coalition Government, as they were concerned about how the new regulations would impact on businesses. However, it was decided that reforms on the new rights would be too difficult to implement because of the threat of legal action by either the TUC or Europe, where the regulations originated.
The guideline for the new rulings has been welcomed by employer groups but they warn that the rules remain arduous. There are also concerns about the financial and administrative burden the new regulations will have on businesses.
Lawyers have said that the Government’s guidance will help bring some clarity to employers, especially surrounding the rules for bonuses, pay and benefits.
Julie Quinn, head of employment law firm Nabarro, said: “Giving agency workers the right to equal pay and benefits as permanent employees from October will have substantial cost implications for businesses that rely heavily on agency workers.
"While the draft guidance does help clarify the scope of the rights to equal pay, benefits and facilities for agency workers, it does nothing to ease concerns about the administrative and financial burdens on employers."
For more information, please visit www.milsted-langdon.co.uk
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