Towards the end of last year, HMRC received criticism for its draft guidance over how consultancy charges would be applied if only a portion of employees advised agree on joining a pension scheme. However, following the criticism, HMRC have updated the guidelines, which now state that the cost of the advice fro setting up a personal pension scheme or a group personal pension scheme would be met from the funds of those employees who join.
Following the publication of the revised guidelines, a spokesperson for HMRC said: “The pensions industry raised concerns with HMRC about guidance it had published at the end of last year about the impacts of adviser charging on members of registered pension schemes.
“As requested by the pensions industry, the updated guidance also gives customers additional assurance on the treatment of consultancy charges, which are paid to firms advising employers on pension provision for employees.”
The new guidelines on adviser charging for personal and group pensions also advises that adviser charges payable in connection with annuity purchases would not affect the maximum tax free lump sum payable.
For more information, speak to London Accountants Harris Lipman.
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( 3 / 154 )Figures from the Department for Work and Pensions have revealed that only a quarter of private sector workers are active members of their employers’ pension schemes – down by a third compared to figures from 2007.
The latest Employers’ Pension Provision survey carried out by the Department for Work and Pensions, along with showing that only a quarter of private sector workers are active members of their employers’ pension schemes, also reveal that only three in ten private sector businesses offer their staff any pension provision – another fall from five years ago, when the figures stood at four in ten.
In addition to a fall in the number of businesses within the private sector offering any form of pension provisions, the survey has also found that twenty-six percent of private sector employees are either active members of a work-place pension scheme or have arrangements whereby the employer makes a contribution to a private pension.
With auto-enrolment only a few weeks away, the figures reveal the need for more to be done by both employers and employees in regard to pensions and planning for retirement; sentiments echoed by one of the authors behind the survey, who said: “This report clearly demonstrates the need for the auto-enrolment reforms, but it also demonstrates the scale of the challenge ahead.
“Many of the very largest employers are ready. But there is still a great deal to be done to spread awareness and build understanding among small employers.”
For more information, speak to London Accountants Harris Lipman
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( 3.1 / 171 )Figures released from the Office for National Statistics have revealed that the UK economy has shrunk by 0.7 percent in the second quarter of the year – a bigger contraction than was expected.
Economists had previously estimated that the economy would contract by roughly 0.2 percent; however the wettest April to June period on record combined with the Queen’s Diamond Jubilee celebrations – which resulted in an extra days holiday – are said to have contributed to the bigger contraction.
It is the third successive period of contraction, after a 0.4 percent contraction in the final quarter of 2011 and a 0.3 percent contraction during the first quarter of this year; leaving the UK in its longest double-dip recession since 1975.
The latest figures from the Office for National Statistics are set to increase the pressure on the Chancellor George Osborne to ease his austerity measures and push for growth.
Yesterday, in a statement the Chancellor said that the deeper than expected contraction was disappointing, and he confirmed the country’s deep-rooted economic problems, before adding: “We're dealing with our debts at home and the debt crisis abroad. We've made progress over the last two years in cutting the deficit by 25 percent and businesses have created over 800,000 new jobs.
“But given what's happening in the world we need a relentless focus on the economy and recent announcements on infrastructure and lending show that's exactly what we're doing.”
The figures from the Office for National Statistics come a week after the International Monetary Fund called on the UK government to prepare a “plan B” to pump life into the economy.
For more information, speak to London Accountants Harris Lipman.
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( 3 / 156 )Within a report published yesterday (July 23rd) a leading think-tank warned the Chancellor, George Osborne, that the austerity programme introduced to boost confidence and encourage investment, is having the opposite effect by deterring businesses and consumers from spending.
The Institute for Public Policy Research have claimed within their report that the UK’s recovery from recession is set to see the long-term GDP growth-rate drop to 1.7 percent over the next three years – the lowest level since the Second World War and the equivalent of £165 billion in lost output over fifteen years.
Within the report, the think-tank’s chief economist, Tony Dolphin, said: “The government's measures to tackle the deficit were predicated on the assumption that they would lead to greater confidence and certainty about the future; in fact, they have had the opposite effect.
“The government should implement temporary tax cuts and a boost to infrastructure spending not offset by cuts elsewhere. This would mean borrowing more in the short term.”
He added: “Fears that more quantitative easing would increase the risk of higher inflation in coming years are misplaced. Inflation pressures in the UK in recent years have been imported and are largely the result of high commodity prices.
“Domestic inflation pressures, for example wage growth, have been very low and this is likely to remain the case while there is a good deal of spare capacity in the economy. The time to worry about inflation is after the economy is restored to growth, not before.”
In response to the think-tank’s warning, a Treasury spokesperson, said: “Reducing the deficit is an essential element for restoring stability and strength to the UK economy.
“Tough decisions taken by the government on fiscal policy have created the space to support the economy through monetary activism such as quantitative easing. It has also established credibility that has enabled firms and households to benefit from low interest rates.”
The spokesperson added: “The government continues to look for ways to use this hard-won credibility to support the economy, as seen in the recent announcements of the Funding for Lending Scheme and using guarantees to help investment in infrastructure, as it protects the UK economy from the ongoing uncertainty and instability in the Eurozone.”
For more information, speak to London Accountants Harris Lipman
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( 3 / 141 )According to a survey published today (July 23rd 2012), despite the Bank of England’s initiatives aimed at boosting lending to the economy, households are set to find it harder to gain access to credit than was thought three months ago.
The latest report, which looks at various aspects of the UK economy states that it is expected that banks will shrink lending to consumers by nearly eleven percent through 2012; an increase of roughly four percent from a forecast in April.
The report blamed the double-dip recession for the weakness in lending, whilst the economic forecast for 2012 has also been downgraded as a result from 0.4 percent to zero percent.
Although it is expected that credit access for households will become tougher for the remaining five months of the year, the report states that the contraction for business lending should not be as much as originally forecast.
In spring, it was forecast that business lending would contract by 6.8 percent; however the revised forecast now expects it to contract by 6.2 percent – despite the announcement last month, of the Bank of England’s Funding for Lending Scheme.
Within its assessment of lending to the business sector, the report states: “Although the schemes should help to lower banks' cost of funding, some banks may be reluctant to access these schemes for fear of the stigma it could create in financial markets.
"The potential positive impact on lending may also be outweighed by the recent deterioration in the economy. Banks will remain reluctant to lend in this environment and demand for credit is also likely to remain weak across all categories of borrower."
For more information, speak to London Accountants <a href="http://www.harris-lipman.co.uk/">Harris Lipman</a>
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