The UK economy grew more in 2012 than previously thought according to figures published yesterday (February 27th) by the Office for National Statistics (ONS) but the figure for the last quarter was left unchanged and showed a contraction of 0.3 per cent. Continue reading
The Bank of England is apparently discussing the ‘extraordinary’ idea of negative interest rates in a bid to boost economic growth after Deputy Governor For Financial Stability, Paul Tucker, told MPs that the Bank could be doing more for the economy. Continue reading
Chancellor George Osborne is facing calls to cut Capital Gains Tax (CGT), as figures revealed that the rise did not bring in any extra revenue and in 2010 cost the Treasury money. Continue reading
In the first such move since the 1970s, ratings agency Moody’s has downgraded the credit rating of the UK from triple-A to Aa1 because of what it calls “weak prospects” for the British economic growth. Continue reading
HM Revenue & Customs (HMRC) has published its first list of tax dodgers, which highlights “deliberate defaulters” found during the department’s investigations into their affairs from April 2010.
This list features nine names – including a hairdresser, a coach operator and a knitwear manufacturer – each of whom had not paid more than £25,000 of tax.
Individuals and businesses named on the list received fines from a few thousand pounds upwards. Cheshire-based wine retailer, The Trade Beverage Company Ltd, was fined £291,830, while a penalty of more than £17,000 was imposed on hairdresser Joseph Tyrrell for dodging tax between October and December 2010.
According to the government, the publication of the names sends a clear signal that cheating on tax is wrong, and reassures the vast majority of people who pay their taxes that there are consequences for those who refuse to tell HMRC about their full liability.
The department also hopes that publishing the list will encourage defaulters to make a full and prompt disclosure and cooperate with HMRC to avoid being named.
However, with the total tax owed by those on the list amounting to less than £1m, Treasury Minister David Gauke was asked why no large corporations were included on the list.
Mr Gauke replied that HMRC was taking action to close legal loopholes, as well as to expose those promoting aggressive tax avoidance schemes.
Chair of the Commons Public Accounts Committee, Margaret Hodge called the publication of the list an “amazing” step forward.
“Publicly naming and shaming does act as a deterrent, as we demonstrated over the Starbucks and Amazon hearing,” she added.
However, she also hoped that HMRC would not just focus on individuals and small businesses, as the general public does not want to see big global corporations “getting away with it”.
For only the fourth time since he became Governor of the Bank of England, Sir Mervyn King was overruled by other members of the Monetary Policy Committee (PMC), this time over quantitative easing (QE).
The minutes of the meeting revealed that three members, including Sir Mervyn, voted to increase QE by £25bn to £400bn, whereas last month, only David Miles wanted to restart the programme.
Last month the Bank raised its forecasts for inflation from those made in November, warning that inflation would hit 3 per cent later this year and not fall back to the Government’s 2 per cent target until the beginning of 2016. Under normal conditions, the Bank would be expected to consider raising interest rates to offset such a rise.
However, officials said they “stand ready” to increase quantitative easing to support the recovery, though they still questioned the effectiveness of current policy tools for easing credit strains in the economy.
In a wide-ranging discussion on the need for “targeted” measures, they said some may be beyond the scope of the central bank and fall under the province of other government departments.
The minutes reported that growth remained subdued and the economy continued to face a number of headwinds, so a case could be made that, if further stimulus was required, policy interventions more targeted at particular frictions or market failures in the economy were likely to be more effective in current conditions than further asset purchases.
Other policies discussed were a possible extension of the Funding for Lending (FLS) cheap credit scheme to “non-bank lenders”. In addition, using QE to buy assets other than gilts and a reduction in interest rates below 0.5 per cent were discussed and, once again, dismissed.
Following publication of the minutes, the pound fell sharply to a 15-month low against the Euro and fell to the lowest since June versus the dollar.
Earlier this week, the UK Treasury and the Isle of Man struck an automatic exchange agreement, which aims to clamp down on tax evaders and may net hundreds of millions of pounds by targeting people who try to hide their money offshore to try and escape a tax bill.
The agreement, which runs from 6 April this year to September 2016, will lead to an automatic exchange of information on people who have bank accounts on the island, and a chance for people to come forward to pay tax.
It forms an integral part of the Government’s offshore anti-evasion strategy, which will be published later this year. The package includes an automatic tax information exchange agreement and the setting up of a disclosure facility.
The disclosure facility will allow investors with accounts in the Isle of Man to come forward and settle their past affairs before information on their accounts is automatically shared, although they will not have immunity from possible criminal proceedings.
Under the automatic exchange agreement, a wide range of financial information on UK taxpayers with accounts in the Isle of Man will be reported to HM Revenue & Customs (HMRC) automatically each year.
It follows the UK-US agreement to Improve International Tax Compliance and to Implement the Foreign Account Tax Compliance ACT (FATCA) in order to minimise burdens on financial institutions.
When the agreement was announced, Chancellor George Osborne said that the Government is also in discussion with Jersey and Guernsey, as part of its common commitment to combat tax evasion, and that tax transparency will be a focus of the UK’s G8 presidency, where it will look to further promote automatic information exchange.
HM Revenue & Customs (HMRC) will finish processing 850,000 letters this week to taxpayers telling them that they are liable for a £100 fine for not filing their tax return by the 31 January deadline. Continue reading
A senior Treasury minister has told the Financial Services Authority (FSA) that the banks must allow businesses that could have been mis-sold an interest rate swaps to cease making premium payments. Continue reading
In his penultimate Quarterly Inflation Report before retiring, Governor of the Bank of England, Sir Mervyn King said that UK inflation will remain stubbornly high for longer than previously thought but that recovery is “in sight”. Continue reading