The lost money is said to have been owed by small business, yet because of errors in calculating tax credits, it went unnoticed by the Treasury until it appeared in the Whole of Government Accounts (WGA) for 2009 to 2010, according to the Public Affairs Committee.
Margaret Hodge, chairwoman of the Commons public accounts committee, said: “The Treasury has departed from accounting standards by leaving out of the accounts of such bodies as Network Rail and the publicly-owned banks.
“This has led to the accounts being qualified by the Comptroller & Auditor General. We want the Government to provide the necessary information so that these accounts are comprehensive and credible.”
The Treasury has since admitted that they’re surprised about the write-off, which along with £105 billion of uncollected tax was called a “‘gobsmackingly, huge, ginormous figure”. But they did say the WGA represented "the most ambitious public sector account prepared anywhere in the world" and that it was working hard to remove the qualifications.
A spokesperson for the Treasury said: "No other country has sought to fully consolidate all public sector bodies, including the local government sector, in one statement of accounts.
“We will build on this first publication and are working hard to remove any qualifications.
"HMRC collects almost all tax debt and write-offs are relatively low. What's more, around 90% of those write-offs are due to insolvency where further debt pursuit is actually barred by law."
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 127 )Union leaders have added pressure on government’s for their handling of bankers’ bonuses, by claiming that changes to the tax system could help raise just under £2 billion per year.
In the TUC’s Bonus Season report, the union have said that corporation tax relief for pay and bonuses worth more than ten times the average earnings should end in the banking and finance sector.
The report claims that stopping the relief on earnings more than £262,00 would raise £1.7billion per year, which would pay back the deficit created by the financial crash.
Brendan Barber, the General Secretary of the TUC, said: “Irresponsible banks played the biggest part in causing the crash. But while the rest of us are still paying a heavy price, banks have gone back to business as usual with eye-watering bonuses for their top staff.
“It is only right that they share these with the rest of us, and making the top bonus pool liable for corporation tax means they would pay a little more towards clearing up the mess they made.
“We should not forget they have enjoyed a level of state support no other industry could dream of, including an £850 billion bailout from taxpayers and the Bank of England.
“Scrapping corporation tax relief for earnings over £262,000 will help pay off the deficit and tackle the growing pay divide that has seen a tiny minority of super-rich individuals receive inflation and performance-busting pay rises while everyone else suffers real-terms wage cuts.
"The Chancellor should use his budget to end the privileged status that the financial services sector enjoys at the expense of everyone else by announcing this new tax on excessive pay and bonuses, as well as taking proper steps to reform our failed executive pay culture."
The Bonus Season report, uses data from the Labour Force Survey to show the total pay and bonuses to staff earning more than £250,000 is £6.8bn; and it found over a third of employees earning more than £250,000 per year within the UK, work within the banking and finance sectors.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 149 )A respected think tank has warned that the UK will fall into another recession this year, if the government continues to “deliberately” damage the economy with its fiscal squeeze.
The National Institute of Economic and Social Research (NIESR) have slashed its outlook for the economy and predicts that it’ll contract by 0.1 percent this year. This news comes as another blow to the government, following official figures released last week which already show that the UK contracted in the final quarter of 2011.
NIESR have said that a return to recession will be driven by squeezed families cutting back further, tight credit conditions and businesses’ reluctance to invest amid uncertainty in both the domestic and foreign markets.
Simon Kirby, from NIESR has warned that it’s obvious that the economy is in poor shape and the degree to which this persists is uncertain.
The think tank is now urging the government to loosen its fiscal stance and shore up faltering demand. NIESR argue that the government could easily afford to invest enough money into the economy to avert a recession this year, without denting its credibility in financial markets or doing any long-term damage to the public finances.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3.1 / 146 )Influential forecaster, the Institute for Fiscal Studies (IFS) have told the Chancellor, George Osborne, that he should consider emergency tax cuts in the budget, if the UK is to avoid a second recession.
With the Chancellor delivering the budget on March 21st 2012, he has been put under pressure by all sides of Westminster and the IFS to make tax cuts.
The IFS have suggested that National Insurance or VAT could be cut by up to £20 billion, by George Osborne, as the economy looks set to deteriorate ahead of a feared Eurozone break-up.
However, despite calling for emergency tax cuts, the IFS have admitted that such a move would only deliver a small boost, and any bigger packages proposed by the Chancellor could potentially undermine investor confidence and do further harm.
An economist at the IFS has said that any proposal for tax cuts need to be timely, temporary and targeted, suggesting that a “temporary cut to VAT has the largest immediate impact.”
It’s reported that, if the rate of VAT was reduced from 20 percent back to 17.5 percent, it would cost around £12 billion a year; whilst a temporary cut to National Insurance contributions for employers would cost around £4.5 billion per year, if reduced by one percent.
Despite the pressure from Westminster and the IFS, the Treasury has said that a tax cut was not affordable.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 2.9 / 131 )A report has revealed that tens of thousands of tax demands are never investigated by an impartial judge, despite there being an Adjudicator’s Office set up to investigate any complaints about the taxman and its mistakes.
The report accuses HMRC of denying a fair hearing for taxpayers who dispute bills, as they fail to highlight their right to have their complaint heard by the adjudicator; claims which are backed up by the reports findings.
From an investigate, the report found that since September 2010 158,598 people have complained about unfair tax demands, yet only 40,827 appeals have been upheld and 117,771 rejected.
It also found that up to April last year, 716 claims had been taken to the independent adjudicator’s office, whilst 83,700 has been rejected – suggesting that only 1 in every 120 complains thrown out is judged independently; yet 1 in 4 which are independently adjudicated are upheld.
Experts say people making complaints to HMRC are unaware they can have their case reviewed by an independent referee; with one expert saying: “There’s a serious lack of information for individuals. A lot of people don’t know what the Adjudicator does or how it works.
“It’s woefully inadequate to have it mentioned at the bottom of the letter in a paragraph. There needs to be a much greater clarification about it from HMRC.”
It’s reported that the information given to those whose appeals are turned down includes only a website address for the Adjudicator, not a telephone or postal address.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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