FSA investigate Barclays chief

Barclays’ finance director, Chris Lucas, is under investigation by the Financial Services Authority (FSA) over the fees paid when the bank undertook two rounds of fund raising during the height of the financial crisis, in order to avoid a state bailout.

In a statement, Barclays Bank said that the FSA probe involves four current and former senior employees, including Lucas, and relates to ‘the sufficiency of disclosure in relation to fees payable under certain commercial agreements and whether these may have related to Barclays capital raisings in June and November 2008'.

In June 2008, the bank raised £4.5bn through an issue of new shares, including £2bn from the Gulf state of Qatar, while in November 2008 it raised a further £6.8bn from another group of Middle Eastern investors.

According to the Guardian, the FSA is looking at key paragraphs in documents linked to the June 2008 fundraising, which cite ‘an agreement for provision of advisory services’ by Qatar Investment Authority to Barclays in the Middle East and ‘to have agreed to explore opportunities for a co-operative business relationship’ with Sumitomo Mitsui Banking Corporation.

The document also states that ‘Barclays and Qatar Holding have entered into an agreement for the provision of advisory services by Qatar Holding to Barclays in the Middle East’.

The total fees disclosed for the June fundraising were about £100m, while for the November 2008 fundraising, the bank provided five separate disclosures of fees that amounted in total to around £300m.

In a statement, Barclays said it ‘considers that it satisfied its disclosure obligations and confirms that it will co-operate fully with the FSA's investigation’, which is expected to last for several months.

(Accountancy Live, 30 July 2012)

Company car calculator

HMRC has updated the company car and car fuel benefit calculator to reflect the increase in the car fuel benefit multiplier from 6 April 2012.

When a company car is made available for the private use of an employee a 'benefit in kind' value is calculated in relation to the car, and the fuel if that is also provided for private use.

This calculator:

•allows you to calculate the 'benefit in kind' value of a company car and, if appropriate the car fuel benefit

•provides an indication of the Income Tax you would be liable to pay for the provision of company car and car fuel benefit

Further details are available from HMRC.

Triple dip?

http://www.accountingweb.co.uk/article/economy-contracts-shock-07/529920

Our clients are reporting good growth, so just hiow accurate are the Government's numbers? Probably about as precise as LIBOR........

Cash in hand

http://www.bbc.co.uk/news/uk-18964640

The government don't seem to grasp the fact that people avoid tax because the rate of tax is too high. If they dropped the rate of tax, there is less incentive to avoid it and you end up collecting more tax (Thatcher's tax reduction programme of the early 1980's amply demonstsrates this).

More anti avoidance

The Government is to ramp up its assault on the tax avoidance industry with a new arsenal of weaponry set to be unleashed against ‘cowboy’ promoters of contrived and aggressive tax avoidance schemes.

Among the proposals revealed by David Gauke, Exchequer Secretary to the Treasury, include toughening up the Disclosure of Tax Avoidance Schemes (DOTAS) rules by giving HMRC stronger powers to force promoters to tell them about avoidance schemes and who is using them. It will also tighten rules to make it easier to impose penalties for failing to provide information to HMRC about a scheme.

The Government will also promote warnings about tax avoidance schemes that are being mis-sold and make it easier for taxpayers to realise when they “are on the receiving end of a hard sell by a less reputable promoter”.

David Gauke said: “Some might say that consultation documents on tax administration are an effective cure for insomnia, but this is one that will keep the promoters of aggressive tax avoidance schemes awake at night.

“We are building on the work we have already done to make life difficult for those who artificially and aggressively reduce their tax bill. These schemes damage our ability to fund public services and provide support to those who need it. They harm businesses by distorting competition. They damage public confidence. And they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride.

The DOTAS regime has already helped HMRC close down around £12.5bn in avoidance opportunities, Gauke revealed, adding that it would continue to adapt with the shifting avoidance landscape.

Since DOTAS was introduced in 2004 and the end of March 2012, 2,289 avoidance schemes have been disclosed to HMRC leading to over 60 changes in tax law to close down avoidance schemes.

At Budget 2012, the Government announced a range of anti-avoidance measures to bring in around £1bn and protect a further £10bn in future revenues from the tax avoidance ‘industry’ over the next five years.

More details are available from HMRC.

Anti avoidance

HMRC has begun a 12-week consultation period on publication of Lifting the Lid on Tax Avoidance Schemes. It seeks to consult on measures to improve the information available to HMRC and customers about tax avoidance schemes and the risks of using them. These include proposals to revise and extend the Disclosure of Tax Avoidance Schemes (DOTAS) regime, which requires promoters and users of tax avoidance schemes to provide information to HMRC. The closing date for comments is October 15 2012.

HMRC is also seeking views as to whether proposals to revise and extend the DOTAS ‘hallmarks’ (the descriptions of schemes required to be disclosed for income tax, capital gains tax and corporation tax purposes) are too widely or narrowly drawn, and on their impacts upon compliance costs and administrative burdens.

Comments from representative bodies, tax agents and scheme promoters, as well as businesses and individuals who may receive marketing and advice about tax avoidance schemes are being sought.

More details are available from the HMRC website.

Penalty suspension

A penalty for careless misstatement in a tax return can be suspended even if relates to a one-off event such as redundancy, a tax tribunal ruled.
In the lower tax tribunal case of Philip Boughey v HMRC (TC/2011/09901) Philip Boughey had mistakenly claimed a tax exemption for a £30,000 redundancy payment in his self-assessment tax return when relief had already been given through PAYE. HMRC charged a 15% penalty for careless error.
Boughey accepted that the penalty was due but appealed against HMRC’s refusal to suspend it. He argued that no suitable condition of suspension existed – citing paragraphs 14 to 17 of schedule 24 of the Finance Act 2007.
Paragraph 14 of schedule 24 says that the respondent may suspend all or part of a penalty for careless inaccuracy but “only if compliance with a condition of suspension would help [the person] to avoid becoming liable to further penalties under paragraph 1 for careless inaccuracy.”
The tribunal ruled against HMRC, which it held had proceeded on an “erroneous legal basis”. The judge, Geraint Jones, noted the appellant’s co-operation ( “material consideration”) and that his mistake was due to carelessness “rather than anything more serious”.
The judge commented: “It is clear... that the decision maker proceeded on the erroneous legal basis that any condition of suspension must be designed to ensure that, in the future, the appellant correctly declared the receipt of any redundancy payments. That was far too narrow a view and discloses a highly material error of law.”
In agreeing to a two-year suspension, the judge applied a condition that Boughey’s tax returns must be completed on his behalf by a chartered or certified accountant.
In her 16 July AccountingWEB tax podcast, Anne Fairpo confessed to mild indignation that chartered tax advisers were not included in that list.
However law firm Pinsent Masons said the tribunal’s decision was “welcome confirmation that the suspension provisions can be used to set a condition which is not specific to the tax return] inaccuracy.”