Speaking on TV yesterday (February 10th), Mr Hunt said that he wants the UK to be amongst the first nations where the elderly do not have to sell their homes to pay for care.
He was speaking ahead of his statement to MPs in which he will outline the Government's response to the report written by economist Andrew Dilnot in 2010 on funding social care.
The Dilnot report recommended setting a lifetime cap of £35,000 on the total people would have to pay towards care at local authority prices, excluding living costs, and raising the value of assets people could hold before having to pay the full cost of their care from £23,250 to £100,000.
However, Mr Hunt’s statement will reveal that, from 2017, the costs of personal care for the elderly in England will be limited to £75,000, although the cap will not apply to the cost of accommodation in residential care homes, which averages around £7,000-£10,000 a year.
The plan would also let people in England with assets of up to £123,000 qualify for some state help, up from the current limit of £23,250 and it is believed that the proposals could help up to 100,000 people who struggle to pay for care.
The measures will see 5,000 more people paying inheritance tax, which some critics are calling a stealth tax, and are expected to contribute about £1 billion over the next five years towards the cost of care.
However, they go against Chancellor George Osborne's Autumn Statement pledge, in December, which was to raise the threshold by 1 per cent, to £329,000 for individuals and £658,000 for couples, in 2015/2016.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 411 )According to recent research, the UK’s small and medium-sized enterprises (SMEs) receive the lowest level of government support for R&D funding than any other major economy.
An analysis by the Organisation for Economic Co-operation and Development suggests that a lack of taxpayer support over the past decade may have “eroded” Britain’s competitive edge, given that R&D capital is seen as one of the major drivers of economic productivity.
Based on spending figures from 2008-9, the analysis shows that the UK ranks last for funding support out of all 27 OECD countries, including America, France and Germany.
According to the study, small firms, meaning those with fewer than 50 employees, fare the worst, although those with between 50 and 249 workers attract only marginally more support.
The OECD said that indirect government support, such as through R&D tax incentives, ranks higher than America, but it is still a long way below that of Canada and France.
According to the report, the decline in R&D spending in this country is largely “historical”. The share of R&D expenditure in output fell from around 2.2 per cent in 1985 to 1.8 per cent in 2010, with both public and business R&D contributing to the decrease.
The Government has been attempting to increase support for R&D by small firms since 2009, including increasing the rate of relief under the tax credit scheme to 225 per cent from last April, making it one the of the most competitive rates in the world. It has also ring-fenced the £4.6bn annual science and research budget amid austerity cuts.
However, the report concludes that there are concerns that the failure to maintain and expand the research capacity over this period at the same rate as elsewhere may have eroded the UK’s competitive edge and that the country may therefore find it more difficult to take a leading role in the next product innovation cycle.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 548 )According to a report published today (February 7th) by the National Audit Office (NAO), HM Revenue & Customs (HMRC) has made good progress on reducing costs in the past year but isn’t doing so well with customer service
The NAO report says that the department maintained its performance in key strategic areas, such as improved cost effectiveness and value for money at the same time as reducing its staff and spending.
However, the public spending watchdog has warned that it is too early to tell what the long-term impact of cost reduction will be on HMRC’s performance, as it faces major challenges, such as making more and deeper reductions over the spending review period while increasing tax revenues, improving customer service and introducing its ‘real time information’ project and changes to benefits and credits.
HMRC made £296 million of savings in the year 2011-12, exceeding its target by 19 per cent. This is about a third of the total savings it is required to make over the four years of the spending review period.
The department exceeded its overall 2011-12 target for collecting additional tax revenues, maintained tax collection and reduced the level of tax debt. It also restored customer service performance from a low point in 2010-11, but did not meet all of its customer service targets.
In total, HMRC is targeting a £955m annual reduction in running costs, as well as bringing in an extra £7bn in tax. This will include cutting the equivalent of 10,000 full-time staff, with 2,400 of these having already gone, while other savings plans include cutting computer costs, moving out of scores of buildings, and improving staff efficiency.
The UK's head of tax, Lin Homer, admitted to the Commons Public Accounts Committee recently that around 20 per cent of people faced waits of more than 10 minutes to get through. However, from April, the department will have a target of making 80 per cent of people wait no longer than five minutes to speak to a member of staff.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 566 )Chancellor George Osborne has confirmed new legislation that will allow customers to switch bank accounts within seven working days, after the Office of Fair Trading suggested there was little choice over current accounts.
The plans, put forward by the Payments Council and set to take effect from September this year, are designed to make transferring funds and direct debit details between banks faster and easier.
For example, as well as the one-week switch, a 13-month automatic redirect on direct debits from a person’s old account to their new one has been proposed. Therefore, if the new provider fails to change personal details, the money will still be taken from the new account and the customer won't incur any penalties.
The move will end the weeks of difficulty and delay customers expect to endure when they try to switch their current accounts from a bank to one of its rivals, which is probably why so few switch accounts at the moment.
Currently Lloyds, RBS, Barclays and HSBC hold 75 per cent of the current account market, which is valued at £9bn. However, in a speech about the future of banks, the Chancellor said he wanted to see consumers given the "most powerful weapon of all - choice".
Mr Osborne also confirmed that the legislation would allow "upstart" banks to get a foothold in the High Street, although the European competition authorities have already ensured that a number of changes are coming in to increase choice, such as the sale of Lloyds and RBS branches.
The Office of Fair Trading has been reviewing the way the UK's banks run current accounts, because of concerns over competition and a lack of focus on customers' needs and in a recent report, it said there was a "lack of dynamism" from the banks.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 540 )Construction output fell again last month at the fastest rate of contraction since last June, with the Markit/CIPS purchasing managers' index for the sector holding at the 48.7 level recorded in December. House building and civil engineering activity also both fell, while commercial construction was unchanged.
The reading, which remains below the 50 mark that indicates no change in output, fell short of economists' forecasts of 49.1. This was mainly due to weak demand and a lack of new projects.
Construction accounts for less than 7 per cent of Britain's gross domestic product, but weakness in the sector was the main drag on the economy last year and helped tip the country back into recession. In addition, the sector remains about 15 per cent smaller as an industry that its 2008 peak.
UK GDP declined again in the final three months of 2012 and another quarter of contraction at the beginning of this year would push the economy into an unprecedented triple-dip recession. However, optimistic data yesterday suggested that the country should avoid that, with optimism rising even within the construction sector.
Tim Moore, economist at Markit, said that January's survey results are another indicator of the severe underlying fragility across the UK construction sector, with output failing to rise in any of the three monitored sub-sectors for the first time since last summer.
While accepting that snowfall at the start of the year may have disrupted output to some degree, he added that unfavourable weather outside is far down the long list of difficulties afflicting construction companies at present.
However, improved confidence in the sector did lead to companies hiring more workers for the first time in four months and companies can take some comfort from the fact that the fall in new orders slowed markedly from December.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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