The study has found that during a seven year period, which ends next year, Britain will have paid almost £30 billion into the EU’s ‘structural and cohesion funds’ targeted at Europe’s poorest areas; but they’ll have received under £9 billion back.
According to the study, for every pound which the Treasury contributed, seventy pence is spent elsewhere in Europe, twenty-five pence returns to the same region and five pence is redistributed between the richer and poorer regions in Britain.
Whilst the study concludes that there is a strong case for richer EU countries to continue to subsidise poorer ones, it also states that large savings could be made if Britain managed its own regional policy.
The author of the study, Pawel Swidlicki, has called for the government to revive a previous British demand for reform by which EU members would pay for their own regional funding, with Brussels spending limited to countries that have less than ninety percent of the European average income.
Mr Swidlicki said: “This could save the UK up to £4.2bn. If this money was re-invested in the UK regions, along with the amount that is currently spent via the EU, the receipts of each UK region should increase by around forty-five percent compared to the amount of grants they currently get.
"The coalition should match the pledge made by the previous Labour government and seek to bring regional policy back to the UK. The economic, social and democratic arguments clearly point in favour of this policy option."
The European Commission, which administers the EU regional policy has challenged Open Europe’s figures, saying: “We don't know what these calculations are based on.
"Last year 271 regions, including 150 in richer countries, signed a letter supporting EU funding amid concern that national policies would see cuts to spending. Having an EU policy is crucial to realise a consistent regional policy of getting investment into poorer areas.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3.1 / 188 )According to the latest figures from the Office of National Statistics, the government’s debt has passed the £1 trillion barrier for the first time; despite a bigger than expected fall in borrowing throughout December.
The latest figures, which are officially released on Wednesday, show public sector borrowing – excluding financial interventions such as bank bailouts – fell £2.2 billion to £13.7 billion last month, a bigger fall than the City’s estimate of £14.9 billion.
The bigger than expected fall in government borrowing during December was partly offset by a £1.3 billion increase in estimates for borrowing between April and November after local government spending was revised upwards.
However, the report shows that the fall still wasn’t enough, with the net debt rising to £1,003.9 billion (64.2% of the GDP) and the highest since records began in 1993.
Despite the figures increasing, the Chancellor, George Osborne, is still on track to hit a target set by the Office for Budget Responsibility to reduce the UK’s borrowing to £127 billion in the financial years – despite fears the UK is on the brink of recession.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 2.9 / 132 )Britain will end up paying the European’s financial transaction tax, whether it joins the scheme or not, the bloc’s top tax official has warned.
Algirdas Semeta, the bloc’s tax commissioner has said that London’s continued resistance to agree to an EU-wide Tobin tax would result in the City paying money to continental tax collectors, without Britain benefiting from the proceeds.
Mr Semeta added: “The UK would lose a lot if other members decide to move ahead with a financial transactions tax.
“Because of its design, Britain will be subject to the tax, but at the same time, it will not receive any money from it.”
He also argued that a financial transaction tax agreed by all 27 EU members could help shore up the UK’s public finances by reducing its annual contribution to the EU’s €140bn-a-year operating budget; saying: “If you take into account the size of the financial sector in the UK, the financial transaction tax would collect significant amounts of revenues, part of which would go into the EU budget.
“This would reduce the UK’s contribution to the budget, which would help reduce their public deficit.”
London, which is able to veto EU tax proposals has stood firm against plans to introduce the tax, yet Brussels look set to impose a tax in much of the rest of the EU and it’s thought that such a levy could use the “residence principal” which taxes any trade by a company that is located within the tax area.
This would mean Britain would be indirectly exposed to at least some of the financial transaction tax’s effects; although it could also benefit from an exodus from other European financial centres.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 147 )It’s feared that SMEs could face a barrage of fines as a result of new rules around the compulsory online submission of all tax returns.
From the start of the 2012 / 2013 tax year in April, HMRC will introduce new rules that mean any VAT-registered business will have to submit its tax returns through the organisations website, rather than through the traditional paper-based form.
However, its been predicted that hundreds of small-and-medium businesses will be hit by significant fines and interest payments for not complying with the new rules.
HMRC carried out a long-running consultation across the accountancy profession about the detail and timing of introducing compulsory online submissions, but some think that HMRC haven’t fully got the message across to the business community about the tax changes.
One expert has said: “HMRC has tried hard to communicate with companies about the forthcoming changes around tax return submission rules. But its doubtful anywhere near as many firms as they’d hoped or expected are fully aware of what’s coming.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3.1 / 143 )Over two dozen of Britain’s top pub and restaurant chains have joined forces to campaign for a cut in VAT, in an effort to boost the country’s ailing leisure industry.
The chains have joined forces to back French hospitality entrepreneur and lobbyist Jacques Borel in his campaign to get VAT reduced from its current level of 20% to 5% on food, drink and accommodation in the UK.
Chairman of Wetherspoon, Tim Martin, said: “In the UK, supermarkets have been able to subsidise their alcohol sales on the back of non-VAT food sales.
"We cannot do that in pubs because we have to pay VAT on food. It is like clean athletes having to take on drug cheats. The supermarkets have been given steroids by the Government for the last two decades."
Jacques Borel has successfully battled for a cut in VAT in France, which led to an increase in jobs within the leisure industry and also saw the government’s tax take from the sector rise, as more people went out.
It is hoped that in the 2014 Budget, the UK will follow Germany, Belgium, Sweden and Ireland who have already dropped their VAT rates – with Ireland dropping their tax from 13.9% to 9% as recently as last summer.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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