News round up… September
W/C 27th September
Green tax adds pressure to motorists and holidaymakers
Motorists and holidaymakers will be the targets of new ‘green tax’ proposals as the Energy Secretary backs plans to increase environmental levies by £15bn. Chris Huhne has given the thumbs up to plans set to increase environmental taxes from £35bn to £50bn annually. Taxes on fuel would go up by 30p per litre of petrol and taxes on plane tickets would also rise. The increase in green taxes could pave the way for lower taxes elsewhere, most notably a cut in employers’ national insurance payments. Speaking at a Liberal Democrat conference, Huhne elaborated, ‘All the evidence is that the green tax switch is popular as long as people can see the extra revenue being used to cut other taxes.’
Watchdog ‘seriously concerned’ about unfair taxes on pensioners
The official watchdog of HM Revenue & Customs has relayed concerns over ‘unexpected tax bills’ faced by pensioners. The annual report revealed that the Adjudicator's Office is ‘seriously concerned’ about poor decisions which seemingly target ’vulnerable groups of people, particularly pensioners‘. Last year HMRC was forced to pay more than £100,000 in compensation to taxpayers who, according to the watchdog, were unfairly treated. This is the latest in a string of bad news HMRC has faced. Last week consumer website MoneySavingExpert revealed that people had complained on their forum about the tax credit helpline service, with some reporting jammed phone lines since July.
W/C 20th September
Government gets tough on tax dodgers
Chief Treasury secretary Danny Alexander has used the Liberal Democrat conference to unveil plans to tackle tax dodgers. He took the opportunity to reveal the £900m plan in a keynote speech at the conference in Liverpool. He claimed the plan, which would in part give HM Revenue & Customs more power to prosecute tax evaders, would claw back an extra £7bn a year by 2014-15. making his debut speech at a Lib Dem conference, Alexander said, ‘There are some people who seem to believe that not paying their fair share of tax is a lifestyle choice that is socially acceptable. It is not. Like the benefit cheat, their actions take resources from those who need them most.’
Tax credit helpline jammed since July
People trying to get through to HM Revenue & Customs tax credit helpline have been experiencing difficulties since July, according to MoneySavingExpert. The consumer website said claimants had complained about the lack of telephone support on its forum, reporting jammed phone lines from opening to closing times. The problem was initially blamed on an upsurge in people calling the office as the deadline approached for tax credit renewal. However, MoneySavingExpert claimed that things had failed to improve since the 31st August deadline because people were now questioning letters they’d received about missing the deadline. An HMRC spokeswoman sincerely apologised for the delay and promised to clear the backlog as soon as possible.
W/C 13th September
George Osborne questioned over ‘fairness’ of tax grab
The country’s leading statistical body has questioned George Osborne over the fairness of his plans for a £5.8bn tax grab from benefits, tax credits and public service pensions. The Royal Statistical Society (RSS) has challenged the Chancellors claim that increasing benefits in line with Consumer Prices Index (CPI) rather the Retail Prices Index (RPI) will better serve claimants. In a letter to the UK Statistics Authority, the RSS suggested the new measures were ‘not the best approach’. Vice president of the RSS, Jill Leyland, said, ‘The fact that CPI is used as an indicator for monetary policy doesn't make it the best measure for other subjects.’ Last week Osborne’s Budget was described as ‘regressive’ by the Institute for Fiscal Studies.
HMRC cuts will delay tax returns
Cuts made by HM Revenue & Customs will lead to a delay in processing tax returns, as they re-prioritise work. Resources will be funnelled into redeploying ‘high priority work’, which will result in longer turnaround times for paper forms handled by the Central Agent Authorisation Team. 31st October is the deadline for filing paper-based self-assessment returns for the tax year 2009/2010. Last week it emerged that HMRC has a sex-year backlog of cases which could mean tax payers owe or are owed tax amounting to billions of pounds.
W/C 6th September
One in five big businesses consider leaving UK
The UK tax regime has prompted around 20% of large British businesses to consider relocating abroad, research has found. The data, collected by TNS-BNRB, revealed that companies are concerned about the lack of transparency in HMRC decisions. It also showed that 64% of bis businesses felt red-tape burdens had increased during the past year. The research, which was commissioned by HMRC, has been described by Roy Maugham of UHY Hacker Young as a ‘poor result’. He continued, ‘These results show businesses are increasingly dissatisfied with the way the tax system and HMRC is working.’
NI contributions holiday for start ups
This week sees the launch of a one-year National Insurance holiday for start ups. The Treasury will give a much-needed tax break for start ups worth up to £5,000 for each of the first ten staff. However, some sectors and regions of the country will be ineligible for the holiday. New businesses in agricultural, fishing and coal sectors won’t be able to claim the break, neither will businesses based in Greater London, the South East and Eastern regions. The move is part of the government’s ongoing attempts to promote growth in the UK economy. Naomi Smith of accountants Grant Thornton, said, ‘If you are going to start up a new business you will probably start one anyway, it just makes it a bit easier as your costs have been brought down in the first year.’