News round up… February
W/C 21st February
UK at ‘extreme risk’ of another economic meltdown
The UK is at ‘extreme risk’ of another economic crisis according to Maplecroft. The risk analyst warned in its annual Fiscal Risk Index that higher taxes, spending cuts and later retirement were all necessary to prevent the country ‘going bankrupt’. The report echoes the sentiments of the Office for Budget Responsibility, which last November warned that without reform the country’s debt will rise to 100 percent of GDP within 40 years. Maplecroft's index is calculated using child and old-age dependency ratios, labour rates of the over-65s, GDP, public debt, and spending on pensions, health and education.
HMRC names and shames persistent tax evaders
HM Revenue & Customs has written to 900 tax evaders to notify them that they are they are 'on probation' in a new tougher approach to persistent offenders. The new crackdown will ‘name and shame’ the worst culprits, which are classified as individuals and businesses who have made 'deliberate errors' of more than £5,000. The new powers of intervention, introduced last year, will see HMRC make unannounced check-ups on the premises of those on probation, with checks on suppliers and customers. HMRC’s Steve Hickman said, ‘Tax cheat check-ups will involve continued and close scrutiny – it is a real deterrent.’
W/C 14th February
Small business face fines of £3,000 for bad record keeping
New proposals made by HM revenue & Customs could see small businesses issued fines of up to £3,000 for poor record keeping. The move, which could be introduced later this year, would affect 50,000 business a year. HMRC will examine existing company records and issue penalties for record deemed not to be "accurate" or "adequate’. It is estimated that the stringent strategy would bring in £600m in fines for the government.
Accountant to the stars in £117m fraud inquiry
An accountant working for firm Christopher Lunn & Co is still facing a full-scale criminal investigation into an alleged £117m fraud, despite a partial win in court. Judge Mr Justice Kenneth Parker said that ‘[Lunn] should have been given the opportunity to make representations before the challenged decision was made and was communicated to it.’ Lunn said the victory ‘gives us the opportunity to rebut the allegations that have been thrown at us.’
However, the partial victory for the firm, whose clients include Sadie Frost and Fiona Bruce, exposed the full scale of the fraud investigation.
W/C 7th February
‘Fat tax’ bid to beat obesity
Takeaways could face a £1,000 ‘fat tax’ as the government attempts to combat rising obesity rates. Council’s say the charge would be used to fund healthy eating campaigns and litter-picking. While health campaigners welcome the scheme, critics claim it will force many small takeaways restaurants out of business. Councils of affected areas have confirmed they will monitor the scheme to see if it has any real effect on obesity in the area. The levy has been pioneered in Oldham, where one in five children aged ten to 11 are classed as obese.
George Osborne targets wealthy ‘non-doms’
Chancellor George Osborne has called for a levy of £25,000 a year to be paid by wealthy non-doms who live in this country but do not pay full taxes. It is the first indication of what Mr Osborne will outline in next month's Budget. While it’s a move that could deter leading business figures from investing in the UK, it would help fund the Coalition's ambition of lifting the tax threshold for the lowest paid to £10,000. The current non-dom levy of £30,000 is only payable by those who have lived in the UK for seven years or more. Treasury documents reveal that four out of five leave the UK before that seven year time limit is up.