Monday 30 January 2012
Thursday 26 January 2012
Taxpayer Statement
A group of Conservative MP’s, backed by the Daily Express, have come up with a brilliant idea. They suggest that every year the Government should send us a Taxpayer Statement, showing how much tax they’ve taken off us and what they’ve done with it.
A sample 2010/11 tax statement would look like this:
Your salary | £15000 | £26000 | £50000 |
£ | £ | £ | |
Benefits and pensions | 948 | 2135 | 5130 |
NHS | 493 | 1109 | 2666 |
Education | 371 | 835 | 2006 |
Public protection | 287 | 646 | 1551 |
Government | 100 | 226 | 543 |
Transport | 94 | 211 | 507 |
Industry and economy | 64 | 145 | 348 |
Housing | 56 | 126 | 303 |
Recreation sport and culture | 57 | 127 | 306 |
Waste and environment | 47 | 107 | 256 |
Overseas aid | 27 | 60 | 144 |
Debt interest | 181 | 407 | 978 |
Total | 2724 | 6134 | 14739 |
Your share of Government borrowing this year | 2221 | 2221 | 2221 |
The above table only includes direct taxes on your salary. It does not include National Insurance Contributions by your employer.
The above table only includes direct taxes on your salary. It does not include indirect taxes. On average every person over the age of 18 paid £2737 in indirect taxes in 2009-10. The main indirect taxes are:
· Air Passenger Duty
· Beer and Cider duties
· Betting gaming and lottery duties
· Capital gains tax
· Climate change levy
· Council tax
· Hydrocarbons oils duty
· Insurance premium tax
· Made wines duty
· Spirits duty
· Stamp duty
· Tobacco duty
· VAT
· Vehicle excise duty
· Wine of fresh grapes duty
Wednesday 25 January 2012
UK Growth
http://www.bbc.co.uk/news/business-16715080
Government numbers show grwith was negative in Q4 of 2011. Not sure how accurate the Government numbers are though as our clients are reporting reasonable growth.
Government numbers show grwith was negative in Q4 of 2011. Not sure how accurate the Government numbers are though as our clients are reporting reasonable growth.
Tuesday 24 January 2012
UK Debt
Current wisdom is that the UK is suffocating under a mountain of debt. Some interesting statistics emerged at the weekend.
The UK's debt burden is amongst the highest in the world as the following table shows (all figures are a % of GDP):
Once again, one has to ask what the FSA and the Bank of England were doing in the years up to 2008 to allow our financial institutions to run up such enormous debts. Interestingly Mervyn King, the Governor of the Bank of England, has refused to undertake an investigation into the Bank of England's handling of the financial crisis.
The UK's debt burden is amongst the highest in the world as the following table shows (all figures are a % of GDP):
- Japan 512%
- UK 507%
- Spain 363%
- Portugal 356%
- Germany 314%
- USA 278%
- Government UK 81% Japan 226%
- Corporate debt UK 109% Japan 99%
- Consumer UK 98% Japan 79%
- Financial sector UK 219% Japan 108%
Once again, one has to ask what the FSA and the Bank of England were doing in the years up to 2008 to allow our financial institutions to run up such enormous debts. Interestingly Mervyn King, the Governor of the Bank of England, has refused to undertake an investigation into the Bank of England's handling of the financial crisis.
Scottish economy post independence
We've been hearing a lot recently about Scottish independence. The Scots shave a vision of their economy post independence as one that is driven by clean energy generation.
However some interesting statistics have recently emerged that cast doubt on whether or not they could create such an economy.
At the moment the creation of renewable electricity generation requires massive subsidies from the Government to make it economically viable. It costs about 3 times as much to generate a megawatt of electricity from wind or solar power as it does from oil or gas.
Scotland currently has 50% of the UK wind generating capacity for electricity. 37% of all renewable electricity is generated in Scotland.
Scotland has, therefore, had massive subsidies from the taxpayer to create this industry. The problem is that only 7% of these subsidies were generated by the Scottish taxpayer. The other 93% came from the rest of the UK's taxpayers.
In order to create a renewable's sector large enough to meet the Government targets, Scotland needs a further £40 billion of subsidies.
Trouble is, if they are not part of the UK, Scotland cannot generate this sort of tax revenue to pay for it.
Alex Salmond's dream of a Scottish economy built on energy generation looks pie in the sky.
However some interesting statistics have recently emerged that cast doubt on whether or not they could create such an economy.
At the moment the creation of renewable electricity generation requires massive subsidies from the Government to make it economically viable. It costs about 3 times as much to generate a megawatt of electricity from wind or solar power as it does from oil or gas.
Scotland currently has 50% of the UK wind generating capacity for electricity. 37% of all renewable electricity is generated in Scotland.
Scotland has, therefore, had massive subsidies from the taxpayer to create this industry. The problem is that only 7% of these subsidies were generated by the Scottish taxpayer. The other 93% came from the rest of the UK's taxpayers.
In order to create a renewable's sector large enough to meet the Government targets, Scotland needs a further £40 billion of subsidies.
Trouble is, if they are not part of the UK, Scotland cannot generate this sort of tax revenue to pay for it.
Alex Salmond's dream of a Scottish economy built on energy generation looks pie in the sky.
Monday 23 January 2012
Redknapp in Court
http://www.bbc.co.uk/news/uk-england-16677743
There have been many rumours about Redknapp over the years. This will be one to watch............
There have been many rumours about Redknapp over the years. This will be one to watch............
Foreign students
Apparently when foreign students come to the UK, they can apply for students loans. However one third of them return home and never repay their students loans! Who on earth set up a system that allows this???
Is it any wonder that the nation is bankrupt?
Is it any wonder that the nation is bankrupt?
Wednesday 18 January 2012
Agency worker rules begin to bite
New Agency worker rules were introduced in October 2011. They have already produced the first strike at Argos (http://www.unionmagazine.org.uk/index.php/news/195-demonstration-at-argos-over-agency-workers-pay) and look set to cause mayhem.
Tuesday 17 January 2012
Economic summary from RBS
http://mail-communications.rbs.com/x/view.asp?id=2P9186782602P
Good summary of the latest economic news in what has been a turbulent week
Good summary of the latest economic news in what has been a turbulent week
Monday 16 January 2012
Vantis Tax Director guilty of £70m tax fraud
From Accounting Web
David Perrin, a professional tax adviser at Vantis, has been convicted of defrauding taxpayers of £70m, HMRC has confirmed.
Perrin, who worked for the Inland Revenue in the late 80s and early 90s, was found guilty at Blackfriars Crown Court for “cheating the revenue by dishonestly submitting and dishonestly facilitating and inducing others to submit claims for tax relief which falsely stated values of shares which were gifted to charities”.
Confiscation proceedings are under way and he will be sentenced on 9 February.
Between 2005 and 2006 Perrin had devised and operated a tax avoidance scheme which he sold to wealthy taxpayers in order to exploit the law on giving shares to charity, allowing him to pocket more than £2m in fees.
He used a network of finance professionals to advise more than 600 wealthy clients to buy shares, worth a few pence each, in four new companies he had set up.
He then listed the companies on the Channel Islands Stock Exchange and paid people money from an offshore account to buy and sell the shares to inflate their price.
The share owners then donated 329 million shares to various unsuspecting registered charities and tried to claim £70m tax relief on a total of £213m of income and company profits.
The scheme proved so popular that Vantis employees performed a ‘smug’ celebratory song at their annual conference, to the tune of “I will Survive”, a HMRC spokesperson said.
It included the verse:
Jim Graham, HMRC criminal investigator, said: "With his knowledge of the tax system, Perrin thought that he was one step ahead of both HMRC and the law.
"This cynical fraud not only stole millions of pounds from taxpayers, but also conned innocent charities into accepting gifts of virtually worthless shares, just so Perrin could inflate his own criminal earnings."
David Perrin, a professional tax adviser at Vantis, has been convicted of defrauding taxpayers of £70m, HMRC has confirmed.
Perrin, who worked for the Inland Revenue in the late 80s and early 90s, was found guilty at Blackfriars Crown Court for “cheating the revenue by dishonestly submitting and dishonestly facilitating and inducing others to submit claims for tax relief which falsely stated values of shares which were gifted to charities”.
Confiscation proceedings are under way and he will be sentenced on 9 February.
Between 2005 and 2006 Perrin had devised and operated a tax avoidance scheme which he sold to wealthy taxpayers in order to exploit the law on giving shares to charity, allowing him to pocket more than £2m in fees.
He used a network of finance professionals to advise more than 600 wealthy clients to buy shares, worth a few pence each, in four new companies he had set up.
He then listed the companies on the Channel Islands Stock Exchange and paid people money from an offshore account to buy and sell the shares to inflate their price.
The share owners then donated 329 million shares to various unsuspecting registered charities and tried to claim £70m tax relief on a total of £213m of income and company profits.
The scheme proved so popular that Vantis employees performed a ‘smug’ celebratory song at their annual conference, to the tune of “I will Survive”, a HMRC spokesperson said.
It included the verse:
They should have changed that stupid lawThe Bedfordshire-based deputy MD had also spent his cut of the stolen cash on expensive second homes, exotic holidays, works of art and luxury cars.
They should have buggered charity
But they have left that lovely tax relief
For folks to pay to me
Jim Graham, HMRC criminal investigator, said: "With his knowledge of the tax system, Perrin thought that he was one step ahead of both HMRC and the law.
"This cynical fraud not only stole millions of pounds from taxpayers, but also conned innocent charities into accepting gifts of virtually worthless shares, just so Perrin could inflate his own criminal earnings."
HMRC Discovery powers
From Accounting Web
The Court of Appeal's decision last month in Lansdowne Partners demonstrated that if a taxpayer has given HMRC all the relevant information, HMRC cannot use section 29 (5) TMA 1970 as a basis of the discovery assessment.
Section 29, in particular sub section 5, allows HMRC investigators to re-open cases when they’ve discovered that tax has been underpaid and inadequate information was provided to identify the issue within the normal inquiry deadline.
Keith Gordon of Atlas Chambers told AccountingWEB: “Since the case of Langham v Veltema the Revenue has taken a robust view in that, short of telling the Revenue on the tax return that the tax return was wrong, the taxpayer cannot be protected from a discovery assessment. The Revenue has repeated this argument on many an occasion with mixed success before the tribunals and courts.
“The Lansdowne Partners decision confirms that the true position is much more balanced and that therefore if the Revenue should have picked up the potential underassessment, they will be precluded from raising a discovery assessment at a later stage.”
A similar approach seems to have been taken by the first tier tribunal judge Howard Nowlan in the Charlton case last summer, which was purely focused on the discovery issue.
Commenting on AccountingWEB's report on the Hankinson decision, which appeared to reaffirm HMRC discovery powers, Gordon explained that it dealt with a relatively minor point - whether the discovering officer needs to be aware which limb of section 29 applied when raising the assessment.
HMRC has long been entitled to raise discovery assessments when they discover errors outside the normal SA enquiry timetable, and that it would be a shame if HMRC were to suggest that the Hankinson case had given the department new powers, Gordon added.
The Court of Appeal's decision last month in Lansdowne Partners demonstrated that if a taxpayer has given HMRC all the relevant information, HMRC cannot use section 29 (5) TMA 1970 as a basis of the discovery assessment.
Section 29, in particular sub section 5, allows HMRC investigators to re-open cases when they’ve discovered that tax has been underpaid and inadequate information was provided to identify the issue within the normal inquiry deadline.
Keith Gordon of Atlas Chambers told AccountingWEB: “Since the case of Langham v Veltema the Revenue has taken a robust view in that, short of telling the Revenue on the tax return that the tax return was wrong, the taxpayer cannot be protected from a discovery assessment. The Revenue has repeated this argument on many an occasion with mixed success before the tribunals and courts.
“The Lansdowne Partners decision confirms that the true position is much more balanced and that therefore if the Revenue should have picked up the potential underassessment, they will be precluded from raising a discovery assessment at a later stage.”
A similar approach seems to have been taken by the first tier tribunal judge Howard Nowlan in the Charlton case last summer, which was purely focused on the discovery issue.
Commenting on AccountingWEB's report on the Hankinson decision, which appeared to reaffirm HMRC discovery powers, Gordon explained that it dealt with a relatively minor point - whether the discovering officer needs to be aware which limb of section 29 applied when raising the assessment.
HMRC has long been entitled to raise discovery assessments when they discover errors outside the normal SA enquiry timetable, and that it would be a shame if HMRC were to suggest that the Hankinson case had given the department new powers, Gordon added.
share ownership
http://www.bbc.co.uk/news/uk-16570840
The Coalition plans to make employee share ownership easier .........................
The Coalition plans to make employee share ownership easier .........................
Wednesday 11 January 2012
How to use LP's to hide your earnings.................
http://www.accountingweb.co.uk/article/tony-blair%E2%80%99s-accounts-%E2%80%98massively-opaque%E2%80%99/522965
How Tony Blair is hiding £8m .......................
How Tony Blair is hiding £8m .......................
Scottish Independence - what does it mean for the English taxpayer??
On 14th July 1693, five ships set sail from Leith for the Panama Isthmus set up up New Caladonia. The venture was financed by vast debts that the Scottish Parliament took on.
It was an abysmal failure and Scotland was bankupt.
Scotland begged the English Parliament to help them out.
In 1707, Scotland signed the Act of Union with England. Under Article 14 of the Act of Union, England gave Scotland a vast sum of money - equivalent to 50 years worth of the Scottish Parliament's income today.
The Scottish economy was bankrupt then and has been bankrupt for the last 300 years.
It currently costs each English taxpayer £130 a week in taxes to keep Scotland going.
Whatever your views on the Union, from a purely English financial point of view, it makes sense to have an independent Scotland as soon as possible.
It was an abysmal failure and Scotland was bankupt.
Scotland begged the English Parliament to help them out.
In 1707, Scotland signed the Act of Union with England. Under Article 14 of the Act of Union, England gave Scotland a vast sum of money - equivalent to 50 years worth of the Scottish Parliament's income today.
The Scottish economy was bankrupt then and has been bankrupt for the last 300 years.
It currently costs each English taxpayer £130 a week in taxes to keep Scotland going.
Whatever your views on the Union, from a purely English financial point of view, it makes sense to have an independent Scotland as soon as possible.
Monday 9 January 2012
Introduction of income tax
On this day in 1799, income tax was introduced.
Income tax was announced in Britain by William Pitt the Younger in his budget of December 1798 and introduced in 1799, to pay for weapons and equipment in preparation for the Napoleonic Wars. Pitt's new graduated (progressive) income tax began at a levy of 2 old pence in the pound (1/120) on incomes over £60 (£5,077 as of 2012), and increased up to a maximum of 2 shillings (10%) on incomes of over £200. Pitt hoped that the new income tax would raise £10 million, but actual receipts for 1799 totalled just over £6 million.
Income tax was announced in Britain by William Pitt the Younger in his budget of December 1798 and introduced in 1799, to pay for weapons and equipment in preparation for the Napoleonic Wars. Pitt's new graduated (progressive) income tax began at a levy of 2 old pence in the pound (1/120) on incomes over £60 (£5,077 as of 2012), and increased up to a maximum of 2 shillings (10%) on incomes of over £200. Pitt hoped that the new income tax would raise £10 million, but actual receipts for 1799 totalled just over £6 million.
Sunday 8 January 2012
Business record check
Criticism forces HMRC to review BRC plans
Published 4 January 2012
Released December 2011
HMRC is reviewing its controversial Business Records Checks (BRC) project following heavy criticism of its approach from tax representative bodies, small business groups and MPs.
Piloted in Spring 2011, HMRC plans to check the paperwork of up to 20,000 small businesses and can issue fines of up to £3,000 if records are deemed to be below par.
Further information on record-keeping is available from HMRC.
A guide to setting up a basic record-keeping system is available from the Business Link website.
Wednesday 4 January 2012
Stephen Lawrence
It is truly shocking that a man should be murdered for the colour of his skin.
What is equally as shocking is the way his alleged killers were brought to justice.
The accused were tried many years ago and cleared of the murder. However, this wasn't the answer the authorities wanted. So the authorities changed the rules to allow the men to be tried again and kept prosecuting them until they got the answer that they wanted.
It is disturbing to see how the authorities decided that the accused were guilty right at the start and kept after them until they got what they wanted, changing the rules to allow them to do so along the way.
This attitude sWhilst not remotely as serious as the Stephen Lawrence case, we very much see the same attitude in tax investigations. HMRC almost decide at the outset of an investigation that you are guilty and are most reluctant to accept that your tax affairs are in order. We have even seen cases where HMRC have apparently manufactured evidence to support their position.
What is equally as shocking is the way his alleged killers were brought to justice.
The accused were tried many years ago and cleared of the murder. However, this wasn't the answer the authorities wanted. So the authorities changed the rules to allow the men to be tried again and kept prosecuting them until they got the answer that they wanted.
It is disturbing to see how the authorities decided that the accused were guilty right at the start and kept after them until they got what they wanted, changing the rules to allow them to do so along the way.
This attitude sWhilst not remotely as serious as the Stephen Lawrence case, we very much see the same attitude in tax investigations. HMRC almost decide at the outset of an investigation that you are guilty and are most reluctant to accept that your tax affairs are in order. We have even seen cases where HMRC have apparently manufactured evidence to support their position.
HMRC
This is apparently an actual letter from HMRC published in the Guardian:
Dear Mr Addison,
I am writing to you to express our thanks for your more than prompt reply to
our latest communication, and also to answer some of the points you raise.
I will address them, as ever, in order.
Firstly, I must take issue with your description of our last as a "begging letter". It might perhaps more properly be referred to as a "tax demand". This is how we at the Inland Revenue have always, for reasons of accuracy, traditionally referred to such documents.
Secondly, your frustration at our adding to the "endless stream of crapulent whining and panhandling vomited daily through the letterbox on to the doormat" has been noted.
However, whilst I have naturally not seen the other letters to which you refer I would cautiously suggest that their being
from "pauper councils,Lombardy pirate banking houses and pissant gas-mongerers" might indicate that your decision to "file them next to the toilet in case of emergencies" is at best a little ill-advised. In common with my own organization, it is unlikely that the senders of these letters do see you as a "lack wit bumpkin" or, come to that, a "sodding
charity".
More likely they see you as a citizen ofGreat Britain
responsibility to contribute to the upkeep of the nation as a whole.
Which brings me to my next point.
Whilst there may be some spirit of truth in your assertion that the taxes you pay "go to shore up the canker-blighted, toppling folly that is the Public Services", a moment's rudimentary calculation ought to disabuse you of the notion that the
government in any way expects you to "stump up for the whole damned party" yourself.
The estimates you provide for the Chancellor's disbursement of the funds levied by taxation, whilst colourful, are, in fairness, a little off the mark. Less than you seem to imagine is spent on "junkets for Bunterish hairsplitters" and "dancing whores" whilst far more than you have accounted for is allocated to, for example, "that box-ticking facade of a university system."
A couple of technical points arising from direct queries:
1. The reason we don't simply write "Muggins" on the envelope has to do with the vagaries of the postal system;
2. You can rest assured that "sucking the very marrow of those with nothing else to give" has never been considered as a practice, because even if the Personal Allowance didn't render it irrelevant, the sheer medical logistics involved would make it financially unviable.
I trust this has helped. In the meantime, whilst I would not in any way wish to influence your decision one way or the other, I ought to point out that even if you did choose to "give the whole foul jamboree up and go and live inIndia
Please send it to us by Friday.
Yours sincerely,
H J Lee,
Customer Relations
Inland Revenue
Dear Mr Addison,
I am writing to you to express our thanks for your more than prompt reply to
our latest communication, and also to answer some of the points you raise.
I will address them, as ever, in order.
Firstly, I must take issue with your description of our last as a "begging letter". It might perhaps more properly be referred to as a "tax demand". This is how we at the Inland Revenue have always, for reasons of accuracy, traditionally referred to such documents.
Secondly, your frustration at our adding to the "endless stream of crapulent whining and panhandling vomited daily through the letterbox on to the doormat" has been noted.
However, whilst I have naturally not seen the other letters to which you refer I would cautiously suggest that their being
from "pauper councils,
charity".
More likely they see you as a citizen of
responsibility to contribute to the upkeep of the nation as a whole.
Which brings me to my next point.
Whilst there may be some spirit of truth in your assertion that the taxes you pay "go to shore up the canker-blighted, toppling folly that is the Public Services", a moment's rudimentary calculation ought to disabuse you of the notion that the
government in any way expects you to "stump up for the whole damned party" yourself.
The estimates you provide for the Chancellor's disbursement of the funds levied by taxation, whilst colourful, are, in fairness, a little off the mark. Less than you seem to imagine is spent on "junkets for Bunterish hairsplitters" and "dancing whores" whilst far more than you have accounted for is allocated to, for example, "that box-ticking facade of a university system."
A couple of technical points arising from direct queries:
1. The reason we don't simply write "Muggins" on the envelope has to do with the vagaries of the postal system;
2. You can rest assured that "sucking the very marrow of those with nothing else to give" has never been considered as a practice, because even if the Personal Allowance didn't render it irrelevant, the sheer medical logistics involved would make it financially unviable.
I trust this has helped. In the meantime, whilst I would not in any way wish to influence your decision one way or the other, I ought to point out that even if you did choose to "give the whole foul jamboree up and go and live in
Please send it to us by Friday.
Yours sincerely,
H J Lee,
Customer Relations
Inland Revenue
Tuesday 3 January 2012
Governor of the Bank of England
"Who knows what is going to happen tomorrow, let alone next month?" - Sir Mervyn King, the Governor of the Bank of England, saying he is bewildered by the pace of events in the economic crisis.
It just goes to show that the so-called experts really have no more idea than the rest of us on what is happening in the economy, let alone how to get it to change direction.
It just goes to show that the so-called experts really have no more idea than the rest of us on what is happening in the economy, let alone how to get it to change direction.
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