HMRC Clamp Down on Evaders as £35 billion is "lost" 
Following news that Britain “lost” £35 billion in uncollected taxes last year, HM Revenue & Customs has vowed to curb tax evasion by hiring a team of 2,000 tax inspectors to pursue wealthy tax evaders in the UK.

In a bid to close a £35 million tax gap, which is the difference between the amount of tax due and the total collected, HMRC will be targeting the 350,000 wealthiest people living in the UK whose wealth exceeds £2.5 million.

The extra tax inspectors being hired are to make sure that Britain's wealthiest are paying their full liabilities.

“The Government has made £917m available to HMRC to ensure that tax rules are adhered to across the board," HMRC said.

Danny Alexander, Chief Secretary to the Treasury, told Sky News that tax evasion and avoidance is “morally indefensible”.

Although the tax gap reduced slightly in 2009/10 to £35 billion, HMRC said there was “no room for complacency” when collecting what is owed.

Dave Harnett, HMRC Permanent Secretary for Tax, said: “The tax gap is the result of a wide range of behaviours and the challenges are constantly changing, but these figures show we are continuing to tackle non-compliance. The tax gap has reduced from 8.5 percent of total liabilities in 2004/05 to 7.9 percent in 2009/10 and we have almost doubled compliance revenue since 2005 to £14 billion.

“HMRC staff have worked very hard to deliver these figures and we are going to do everything we can to achieve even more.”

David Gauke, exchequer secretary to the Treasury, said: 'Although these numbers show continued progress by HMRC in reducing the tax gap, there is no room for complacency. Just in the last few weeks we have challenged offshore tax evaders, closed tax avoidance loopholes and created a new HMRC unit to ensure that the wealthier members of society pay their share.

“We will continue to take action to prevent a minority of rule breakers dodging their responsibility to pay the right tax at the right time.”

For more information, please visit www.milsted-langdon.co.uk

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IMF Cuts UK Growth Forecast 
The International Monetary Fund (IMF) has cut its growth forecast for the UK economy, predicting that the economy will expand by just 1.1 percent in 2011, rather than 1.5 percent as predicted in June.

The news will come as a blow to the Chancellor George Osborne. However, IMF had some advice for the Chancellor - ease the pace of deficit reduction in the event of any further downturn in activity.

The IMF signalled that Mr Osborne should also look to lowering his growth forecast for 2012.

When making tax and spending judgments, the Chancellor is currently guided by economic forecasts from the independent Office for Budget Responsibility. However, they have in the past proved to be over-optimistic.

The IMF also said the Chancellor may need to slow down the pace of his deficit reduction plans, although he has so far resisted in doing so.

The UK was hailed by IMF as one of the three big developed economies at risk of a double-dip recession, with the IMF World Economic Outlook claiming the global economy was entering a “dangerous phase”.

"Although the recession has ended, many economies continue to operate far below pre-crisis trends. Output losses relative to trends are largest for economies that were at the epicentre of the crisis, such as the United States and the United Kingdom," said the IMF.

The fund predicts that global GDP will expand "at an anaemic pace of 1.5 percent in 2011". And it believes global growth will shrink to 4 percent in 2012 from 5 percent in 2010 on factors such as "major financial turbulence in the eurozone".

"Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing," the IMF said.

The IMF's World Economic Outlook pinpointed the Japanese tsunami and the rise in oil prices prompted by the unrest in north Africa and the Middle East as two shock events to hit the international economy in 2011.

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Vince Cable Targets Executive Pay  
Speaking at today’s Liberal Democrat conference in Birmingham, Business Secretary Vince Cable has vowed to tackle “the escalation of executive pay”.

Mr Cable said he wants an end to “payouts for failure” and that executive pay needs to become “more transparent” as it is often not linked to share values.

The Business Secretary proposed that shareholders should have more say on the wages executives receive. One option would be a discussion paper that would be aimed at limiting multi-million pound pay deals. Companies could also be required to set out the criteria used to determine pay and perks and putting employee representatives on remuneration committees.

“Further discussions” will take place regarding the paper being published next month, Downing Street said.

The Business Secretary also spoke of his regret for not doing enough to curb bank bonuses and said there needed to be a “narrowing of inequalities”.

Mr Cable also told the conference that he was consulting on the best way to tackle the escalation of executive pay, saying that it has “lost any connection with the value of shares, let alone average employee pay.”

He said: "It is hard to explain why shareholders can vote to cut top pay but the managers can ignore the vote.

"And surely pay should be transparent; not hidden from shareholders, and the public. I want to call time on pay outs for failure."

Earlier today, the Mr Cable told the BBC: "Executive pay has increased by over 400 percent over the last decade at a time when share prices haven't increased at all and basic pay of most employees hasn't increased at all."

Details of each executive board member's salary, pension, bonuses, and shareholdings are recorded but in separate parts of the annual report at present.

However, in October 2012, changes to the reporting requirements for all stock exchanged-quoted companies will come into force. They will be brought together in one table under the new system, with a total figure given to shareholders for the first time.

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Tougher Penalties for Late Tax Returns 
Under a strict new system, HMRC are issuing tougher penalties that could hit people who fail to submit their tax return on time.

Late tax returns could lead to people facing a fine of up to £1,600, whether or not they have extra tax to pay.

Approximately10 million people in the UK must submit a self-assessment return each year. These include the self-employed, company directors and those with many incomes; however, they could now be hit with the hefty fine if they are late in submitting the return, even though many believe they have no extra tax to submit.

October 31 is the deadline for paper returns, and 31 January is the latest people can submit their tax returns online.

The cost of the fine has accelerated under the new stricter system - filing a late return previously only resulted in a £100 fine.

The new stricter system outlined by HMRC will still see taxpayers receive an initial £100 fine for filing after 31 January, however, if the file is not paid for the next three months an additional £10 per day will be added, up to a maximum of £900.

If the return has still not been filed for a further three to six months, HMRC will issue the taxpayer with a £300 fine or five prevent of the tax that is due – in other words, whichever is higher.

For returns that are not filed between six months and 12 months another £300 fine will be issued or again five percent of the tax owed. In the more serious cases, the taxpayer could potentially be fined 100 percent of the tax owed.

And a taxpayer who has a year-long outstanding tax return could end up being fined for at least £1,600.

Fines were once cancelled if the taxpayer did not owe money to HMRC because there was no extra tax to pay or because it had been paid, however, this is no longer the case with the new system. Taxpayers will still need to pay the fine.

The stricter system will mean that taxpayers need to be extra cautious when filing their tax return and be aware of any possible penalties that could come their way. They could find themselves receiving a significant penalty, even though they believe they have correctly paid all of their tax.

For more information, please visit www.milsted-langdon.co.uk

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Google Behind Scheme to Help Small Businesses 
Web search giant Google are launching a scheme to help small businesses grow online, with SMEs in Liverpool being the first to benefit.

Around 1,500 businesses in the city are set to receive one-to-one advice during the pilot scheme. Businesses will be advised on building a successful website and how they can maximise their Search Engine Optimisation (SEO).

If the pilot scheme is a success, the initiative will then be launched across the UK.

Google UK’s head of small business initiatives, Raj Saggi, said that this would be the first time Google has focused a great deal of time on one city’s internet economy. And there were also reasons as to why Liverpool businesses were chosen to test out the initiative.

“With Liverpool's strong business networks and sense of community, we believe this is the best city to run such an initiative,” he said.

Matt Brittin, managing director of Google UK, said small businesses were put off because they thought launching online was “too complex and complicated”.

“What we’re trying to do now is go a bit deeper, to try to understand what businesses are doing and how best to aid their growth. We’re coming to spend a significant amount of time working with people in a community and helping people make the most of the internet,” he said.

"It's all about developing the ecosystem. We care about the internet's potential to do good and we think that if we can make it a better place for businesses and consumers, the rest will follow. The UK is good at this stuff. It is the worldwide leader in e-commerce, but it is time to start thinking bigger.

"This is the first time we’ve done this – we’re looking to see what we can learn from it."

Following allegations that Google has become too powerful and predatory, the web search giant is launching various initiatives to shake off the image with Google chairman Eric Schmidt even declaring that the company “loved” Britain. He said that the company would be willing to pay more tax into Great Britain if our tax laws were not so weak.

It will be interesting to see how successful the scheme is in Liverpool and to see if Google will offer their advice to small businesses across the UK.

For more information, please visit www.milsted-langdon.co.uk

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