The report by the Lords committee on Financial and Economic Affairs has claimed that the proposed financial transaction tax would not meet its stated objectives.
Within the report, it is also stated that the introduction of the financial transaction tax would force many of the financial businesses to leave the UK, which in turn would have a “highly damaging impact” on the British economy; which it was announced earlier this week has contracted for two consecutive periods.
The Lords committee has said within their report: “The Government should absolutely not agree to the proposals in their current form.
“There is huge uncertainty about the impact of any financial taxation proposal on the UK and the Government need to redouble their efforts to influence the debate.”
Even if the UK do reject the tax, which George Osborne called “a bullet aimed at the heart of London”, it is set to cost British-based companies as much as 22 billion euros a year and cause 4,500 job losses, according to a recent study.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 487 )Forecasters from the Organisation for Economic Co-Operation and Development (OECD) have said that the UK has slipped back into recession; after its economy shrank again during the first three months of 2012.
It had been widely expected that despite an end of year slump in 2011, Britain would avoid a double-dip recession as a result of the economy growing within the first three months of last year.
However, yesterday’s announcement that the British economy had contracted by 0.3 percent during the final quarter of 2011stoked fears that the economy could once again slip into recession.
These fears will be extended following the OECD’s figures, with the Paris based group expecting economic output to fall at an annual rate of -0.4% during this first quarter; which will officially see the UK slip back into recession following two consecutive months of negative growth.
The news will come as a blow to the Chancellor, George Osborne, who in his budget speech last week predicted that the economy would avoid slipping into recession.
During his speech last Wednesday, the Chancellor announced that the Office for Budget Responsibility had estimated the UK would be in positive growth within the first quarter of 2012 – with the final growth being predicted as 0.8 percent in 2012, 2 percent in 2013, 2.7 percent in 2013 and in 2015 and 2016 3 percent.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3.1 / 470 )The Bank of England’s governor, Sir Mervyn King has said that he expects the UK economy to contract between April and June, as a result of the Queen’s Diamond Jubilee Bank Holiday.
During a speech at the House of Lord’s Economic Affairs Committee, Sir King forecasted a repeat of last year, when the Royal Wedding Bank Holiday hit output.
Sir Mervyn King told the House of Lords: “We do expect quite possibly a fall in output in the second quarter, followed by a rise in the third quarter, as we will lose an extra day's work – it doesn't necessarily follow that we will lose that whole day's output – because of the national bank holiday.
“Last year we saw that pattern again. We would expect that to happen again.”
Along with predicting that the extra Bank Holiday would have an impact on the UK economy, Sir King told the committee that the economy was still not back to normal following the financial crisis; and he warned that it would take some years before the country is back on track, stating the economy "still felt like a crisis.”
The Bank of England governor did offer a glimmer of hope, however, by adding: “We are going through a major period of deleveraging, we still have some way to go in that respect and we still have the problems in the Euro area. It will take a number of years before we are through all this.
“I see no economic reason why we cannot, in the long run, go back to the sort of growth rates we had before.
“Once we come through this crisis we will able to get back to that sort of period again, but it will take some time.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3.1 / 719 )During the budget last week, the Chancellor, George Osborne unveiled plans to raise the inheritance tax exemption for nom-doms in a move which has been criticised by Labour.
According to Labour’s analysis of the budget, George Osborne “buried” the proposed increase in inheritance tax exemptions for spouses outside of the UK, in the middle of the Treasury’s explanation of the budget.
Currently a taxpayer domiciled in the UK can transfer their full inheritance tax allowance of £325,000 to their spouse, as long as they are also based within the UK; whilst the figure is reduced to £55,000 for spouses outside of the UK. It is the latter figure which the Chancellor plans to increase.
The shadow cabinet minister who unearthed the change within the budget, Lord Wood of Anfield, said: “This was a budget that raised tax on pensioners and made millions of hard-working families pay more. But buried in the millionaires' budget is a measure which gives non-doms a tax break.
“People will be baffled that in these harsh economic times, the Tories think it is a priority to give more tax advantages to non-dom couples who include some of the wealthiest people in the world.”
Despite the criticisms from Labour, it is believed that the change being introduced by the Treasury is to avoid a legal challenge from the EU.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 718 )Leaked documents have shown that football clubs who have gone into administration have failed to pay virtually any of the £40 million they owe the taxman.
The documents show that HMRC have had to write-off much of the debt, as the result of a rule which puts the taxman at the bottom of the pile of creditors; whilst the same documents also show that football clubs and footballers are given priority when it comes to repaying debts.
According to the papers, which have been submitted to the High Court by lawyers acting on behalf of HMRC in a landmark case it has brought against the Football League; football clubs in financial trouble have cost the taxpayer nearly £40 million since 2000.
Within its written submission to the High Court, the HMRC lawyers said: “The Football league have constructed a device under which, on insolvency, football creditors are paid in full whilst ordinary unsecured creditors of the same class receive a very modest dividend.”
A judge is now considering whether to declare the so-called “Golden Rule” – which gives the preferential treatment to football-related debts during administration – unlawful; with the ruling expected shortly.
A spokesperson for HMRC has said: “The rule is unfair. If the HMRC action is successful there will be benefits to all non-football creditors.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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