News round up… July
W/C 26th July
‘Unworkable’ green tax could prevent housing market recovery
A new tax originally proposed by the Labour government, could add £850 to the cost of buying a typical home. The plan, which is being considered by the coalition, would ask add a 0.5% stamp duty if a house has a bad energy rating. The tax forms part of a government initiative to reduce greenhouse emissions by 34% from their 1990 levels, by 2020. Property professionals, however, have criticised the proposal, claiming it would harm the housing market. Zoopla.co.uk’s Nicholas Leeming said, ‘Some 65% of UK homes were built before 1965, and in London 27% before the first world war. This would clearly be unworkable.’
Tax officials target dentists and doctors in latest crackdown
Doctors and dentists have become the latest in a line of professionals to come under increased scrutiny by HM Revenue and Customs. Tax officials have collected £9m in unpaid taxes in a disclosure campaign. While 30,000 medical professionals were contacted, just 1,500 responded, prompting officials to urge others to come clean. Those who contacted the authorities by 30th June paid past tax, interest, and a penalty of 10%. For those that missed the deadline, the fine ranged from 20% to 100% of the unpaid tax. A Revenue spokeswoman said, ‘Anyone who has been evading tax should talk to us as a matter of urgency, as voluntary disclosure always makes financial sense.’
TUC warns tax credit changes will hit the poor hardest
Changes to tax credits could mean that half a million low-income families are £1,000 each worse off, the Trades Union Congress (TUC) claims. Research focused on the way tax credits are calculated. While TUC predicts entitlement calculations will leave half a million families out of pocket, the government insists low earners will be £200 a year better off. Brendan Barber general secretary of the TUC said, ‘This is another reminder that we are very definitely not all in this together. While the rich have been let off the hook, those on middle and low incomes are being left to pick up the cost of the recession.’
W/C 19th July
Vince Cable ‘There is still a long way to go’ in graduate tax debate
Business Secretary Vince Cable has outlined proposals for a variable graduate tax, which he claims will make England’s student funding system fairer. Proposals would see tuition fees paid through taxation once graduates begin earning, with the highest earners paying more. Last week Cable warned that students would ‘almost certainly’ be paying more due to funding cuts hitting the education sector. Some predict that tuition fees could rise from £3,225 a year to as much as £7,000. The University and College Union (UCU) has criticised the new variable tax proposal, claiming it simply ‘rebrands’ student debt.
UK tax system over complicated
The government has pledged to simplify UK tax law, which has been described as a ‘spaghetti bowl’ of confusion. Chancellor George Osborne has set up an Office of Tax Simplification to clarify the 11,000 page UK tax code. He announced the new body, saying it was his ‘dream… that people might actually understand the tax laws which with they were being asked to comply with.’ Initial reviews will include streamlining 400 tax reliefs, allowances and exemptions and offering a simpler alternative to the controversial IR35 code affecting small businesses.
W/C 12th July
Coalition split on married couples’ tax allowance
Sarah Teather, the Liberal Democrat Children and Families Minister has confirmed that the married couples’ tax allowance continues to split opinion in the coalition government. Speaking at the Family and Parenting Institute, Teather said the parties had disagreed on very few policies, but described this particular one as ‘very controversial between our parties.’ Despite being one of David Cameron’s flagship proposals in the lead up to the election, the married couple’s tax allowance is mentioned only fleetingly in the coalition programme.
UK Athletics urges change in tax laws
UK Athletics (UKA) has called for a change in taxation laws after a 50% tax rate prevented triple Olympic champion Usain Bolt from appearing at the Diamond League event next month. The 23-year-old sprinter would have also been obliged to pay a proportion of his worldwide earnings, despite his not living in the country. UKA said, ‘It is regrettable that British fans are denied the chance to see this amazing talent.’ The Diamond League is just the latest in a line of sporting events marred by tax laws. Wembley recently missed out on hosting football's 2010 Champions League final because of existing legislation.
Neighbourhood shares £50,000 council tax refund
Neighbours on a street in Solihull have been refunded £50,000 after challenging their council tax band. The 17 households involved will share the refund between them. Cliff Morrey, who has lived on the street for over 20 years, began the challenge after it emerged that 22 of the 108 houses on Woodrow Crescent were 'F' banded when they should have been 'E'. So called ‘drive-by valuations’ may be to blame for the discrepancy. Figures show that 210,000 homes in England have had their council tax band changed since 2006. Of those 70% were found to have paid too much.