HM Revenue & Customs’ (HMRC) Internal Review Procedure, brought in on April 1 2009, has provided an easier method of querying tax appeal decisions and a growing number of firms are using the procedure.
According to HMRC’s own site, ‘the new review process will help provide a more consistent approach to the way we seek to resolve disputes with those who disagree with appealable tax decisions made by HMRC. Reviews … will be done by a trained review officer, who has not previously been involved with that decision, who will be able to offer a balanced and objective view.’
But is this ‘balanced and objective view’, which meant that almost sixty per cent of decisions were overturned between the inception of the Review and September last year, a good thing or a bad one?
If such a high percentage is overturned at Appeal, might it not mean that the penalties were issued wrongly in the first place? There has even been speculation that HMRC might be under pressure to issue as many fines as possible, or is, in common parlance, ‘trying it on’.
However, HMRC refutes this suggestion, saying that surcharges for late returns, which form the majority of penalty notices, are issued automatically and would generally be withdrawn or reduced if there was a good reason for their late filing.
A spokesman said that “the internal review process is there because we are listening to our customers”.
The statistics could also be viewed as a measure of the fairness of the review procedure. Whatever your point of view, it would appear that merely accepting a penalty is no longer the only option.
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( 3 / 237 )The experts were predicting a slowdown in the rate of growth during the last quarter of 2010 but few had foreseen the alarming figures released today which showed a contraction of 0.5 per cent.
This contrasted with growth of 0.7 per cent in the previous quarter and a healthy 1.1 per cent the quarter before that.
Immediately, the claims and counter-claims began, with opponents of the government’s austerity programme arguing that, by cutting public spending too quickly and too deeply, they had blown the economy off course.
However, chancellor George Osborne resisted calls to change policy, claiming that the measures taken so far had restored Britain’s international credibility and, without December’s poor weather, the figures would have been healthier.
Nonetheless, the government is likely to be disappointed by the latest numbers, which show the economy still has some way to go before it returns to normality. An early rise in interest rates may have also become less likely, despite inflation continuing to remain above target.
Of course, the figures may yet be revised upwards and the relatively mild weather so far in 2011 may help to reverse some of the losses. Nonetheless, today’s news has shown once again the delicate balancing act government has to perform in keeping the economy on track.
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( 3 / 199 )The weekend’s news that the government and leading banks have failed to reach an agreement designed to free up billions of pounds in loans to businesses is not what anyone will want to hear.
It appears that the two sides are still split on the detail of a deal designed to increase lending while also taking some of the pressure off the banks over bonuses.
According to reports, the government wants the banks to agree to lend more to businesses – some sources indicate a figure of £200 billion – but it seems the banks may want to set the figure lower. There are also suggestions that the banks – Barclays, Lloyds, Royal Bank of Scotland and HSBC – are reluctant to give in to demands that they reveal the details of top pay and bonus packages.
Still, there are hopeful signs that a deal will be reached as both sides are likely to want to come to an agreement before the banks start to report results next month.
As BBC business editor Robert Peston says: “You'd think RBS, Barclays, HSBC and Lloyds would all be desperate to show that they're doing their bit to support small businesses and economic recovery – and take some of the sting out of the widespread criticism of the substantial bonuses they are set to pay.”
As we wait for the current impasse to be resolved, it is interesting to look back to February 2009 when then prime minister Gordon Brown, writing in the Observer, sketched out a future where bankers would be the "servants" rather than the masters of Britain's economy: some will be wondering what has happened to that vision and whether much has changed over the last two years.
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( 2.9 / 183 )At a time of decidedly mixed economic news, UK manufacturers have been providing a much-needed ray of light with production and employment levels up and exports putting a dent in the UK’s long-standing balance of payments deficit.
However, there is a cloud on the horizon – according to the Confederation of British Industry (CBI), manufacturers are finding it increasingly difficult to absorb the upward pressure on commodity prices. As a result, the organisation says domestic prices are set to rise ‘strongly’ over the coming months.
If so, that is likely to give the Bank of England a headache it could do without, by adding to the upward pressure on inflation. Despite inflation running consistently above target, the Bank has held back on increasing interest rates as it fears the effect that will have on the wider economy. And a rise in interest rates as a result of higher manufacturer prices could hit domestic demand which in turn would be likely to affect those same manufacturers, even if exports hold up.
The CBI survey found that 13 per cent of companies had already passed higher costs on to their customers during the previous three months, while 31 per cent expected to do so in the current quarter.
Once again, the key question will be whether any price rises are the result of more ‘temporary’ factors which are outside the UK’s control, but the Bank’s increasing use of this explanation is wearing thin in some quarters with increasing demands that a rate rise of some sort is needed soon.
Rising costs from manufacturers, while understandable, will not make that decision any easier.
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( 3 / 194 )It’s a funny old world, as they say and if anyone ever doubted it, this week has thrown up a variety of news to prove the point.
Yesterday, for example, saw the opening of One Hyde Park, said to be the world’s most expensive apartments. Located between Knightsbridge and Hyde Park, the development contains 86 luxury flats, with the one bedroom option starting at around £6 million.
Last summer, a penthouse reportedly sold for £140 million and it appears there is no shortage of takers, despite the high price tags – the development is believed to be 65 per cent sold.
Contrast that with the latest State of Trade Survey from the Federation of Master Builders, for the fourth quarter of 2010. Companies with declining workloads in the quarter rose to 38 per cent and when it comes to 2011, 47 per cent expect workloads to contract further. Almost a third of firms also expect employment levels to drop.
Over at investment bank Goldman Sachs, we hear today that around 35,700 staff worldwide, including 6,000 in the UK, shared a pay and bonus pot of £9.6 billion in 2010 – an average of £270,000 each. At the same time, the bank slashed its donations to charity, from $500 million in 2009 to $200 million last year.
That news came a day after unemployment figures showed that 951,000 16 to 24-year-olds are out of work, a record high. One in five in the age group is now jobless.
In the world of sport, Aston Villa this week set a different kind of record, this time for transfer fees paid by the club. Darren Bent’s move from Sunderland to Birmingham could end up costing Villa a cool £24 million
Meanwhile, the School Sports Partnership initiative, which supports work to increase sporting opportunities for children, will be axed by the government next summer as part of cost-cutting measures.
Yes, it really is a funny old world.
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