HM Revenue and Customs has devised a tougher penalty regime that will replace the existing rules which allow many people who enter inaccurate tax returns to escape without receiving a penalty.
The new regime will focus on setting tougher minimum penalty rates regarding deliberate errors found in tax returns. If errors are discovered by HMRC inquiries, penalties will be as much as 100 percent of the tax owed.
MPs have called for a tougher penalty regime following a report published in the Commons Public Accounts Committee, which revealed staggering evidence of tax cheats receiving considerably low penalties, and some receive none at all.
The report said over a quarter of civil investigations into fraud resulted in a penalty of less than 10 percent of the tax due. Concern in MPs was raised when it showed that 14 percent of cases received no penalty at all.
The HMRC said that a new penalty regime has now come to force for tax returns relating to 2008-09 onwards.
It is good to see that tougher penalties are being put in place. For too long now, people have been too confident in making deliberate errors in their tax returns, knowing that they will ‘get away with it’.
For more information, please visit www.harris-lipman.co.uk
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( 3 / 242 )Things aren’t looking any better for job seekers, with unemployment levels being at their highest since 1994, according to the Office of National Statistics (ONS).
In just three months (November to the end of January), unemployment levels rose by 27,000 to 2.53 million, the highest it has been for 17 years.
However, at the same time the ONS revealed that in February the number of people claiming jobseeker’s allowance fell by 10,200 to 1.45 million.
It was good news for workers wage packets, with the ONS report revealing that the average earnings in January were 2.3 percent higher than the previous year. This was thought to be mainly driven by bonus payments in the finance and business services sector.
However, the Bank of England warned that, although the figures for January were higher than expected, when it comes to wage growth it is well below the level of growth.
The ONS report revealed evidence of the increase of the working population with statistics showing that a record number of 50 – 64 year olds were in work, with their numbers rising by 25,000 to 7.3 million.
Ahead of next week’s Budget, the Government will need to act on these statistics. Once again, regulations that are an obstacle for small businesses need to be cut in order for them to create more job opportunities and for them to be encouraged to invest.
For more information, please visit www.harris-lipman.co.uk
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( 2.9 / 236 )Ahead of next month’s Budget, Ed Miliband and Ed Balls have outlined Labours’ economic policy in Opposition, which has renewed an attack on City excess with calls for a £2 billion tax on bankers’ bonuses that would then be used for funding jobs and homes.
Labour believes the Coalition Government should not have chosen to make cuts on taxes for banks. Instead, the money from adding a hefty tax onto bankers’ bonuses could be used to build 25,000 homes at a cost of £1.2 billion, which would also generate thousands of jobs for the construction industry.
Ed Miliband also urged George Osbourne to cut VAT on fuel in the Budget next month. He said returning the VAT on fuel to its previous level of 17.5 percent would ease the burden on motorists. However, this policy was quickly dismissed by Government ministers who said that this action would be illegal under European Union rules.
Is it a case of too little too late for Labour? Ed Balls admitted that Labour should have done more in the battle against bankers’ bonuses when they were in office.
There were some indications from Mr Balls that Labour would have delivered a Budget with some tax relief if they had been in power, and that Labour had a policy of no “preordained” cuts this year. The Conservative party, however, have insisted that Labour wanted almost as many cuts as the Coalition Government.
Government ministers have since attacked Labour’s economic policy by claiming the party were in denial about the economic state of the UK.
It remains to be seen as to whether the Labour party are all talk and no action. It would have been interesting to see what initiatives the Labour party have in supporting smaller private businesses in the UK.
For more information, please visit www.harris-lipman.co.uk
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( 2.9 / 224 )Tax changes made by the Government are said to be benefiting multinational companies rather than smaller private firms, a new survey claims.
The survey, by accountancy firm BDO of more than 200 senior managers and directors, revealed that tax reforms were too focused on ensuring they were beneficial to larger companies and left little support to small and medium-sized companies.
The prevention of multinational companies moving their headquarters from the UK was called an “urgent priority” by 26 percent of those surveyed. Some of the reforms made by the Government, including reducing the main corporation tax rate to 27 percent, were accepted by 53 percent of managers and directors.
The plan to loosen the Controlled Foreign Companies regime was condemned by 31 percent, who believe that it should have been resisted by the Government. The Controlled Foreign Companies regime applies to businesses that are subject to a lower level of tax because they are controlled in the UK but are situated overseas. Many of those surveyed believed that the Government should have not given in to demands for niche reforms, such as this, which only seem to benefit multinational firms and move away from benefiting SMEs.
The Government needs to implement tax changes that will benefit smaller firms, as it could be argued that larger companies are in a better position to arrange their tax affairs, whereas smaller companies are more in need of tax reforms that they will benefit from.
A simplified tax framework is what smaller businesses need to stimulate economic growth in the private-sector.
For more information, please visit www.harris-lipman.co.uk
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( 3 / 100 )The UK’s “compensation culture” has been put under the media spotlight after MPs launched an attack on insurance firms for allegedly encouraging injury claims following car accidents.
Insurance firms were targeted by MPs following a report by insurers’ association Transport Select Committee, which revealed that firms are paid a fee for referring the names of people involved in car accidents onto lawyers. The person involved in the car accident may then be persuaded to sue for compensation, it was claimed.
The Transport Select Committee believe that the “compensation culture” was behind the current rise in legal costs and that more needed to be done to tackle the issue. The association believe that motorists are paying the price, estimating that £40 a year is added to average motor premiums because of the rise in legal costs.
Fraudulent injury claims was another issue that came to light in the report, with the association believing that staged car accidents were increasing the cost of car insurance. The Transport Select Committee believe that a special police unit dedicated to sniffing out fraudulent claims would solve the issue, but this would have to be funded by insurers.
There were also calls for more transparency on referral payments because consumers are unaware of where their money goes within the insurance industry.
With car insurance costs on the increase, it is vital that the UK’s “compensation culture” is tackled, ensuring that more is done on seeking out the fraudulent injury claims that are causing extra costs to motorists.
For more information, please visit www.harris-lipman.co.uk
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