During the budget in March, the Chancellor announced his plans to bring in an annual cap of tax-free giving of £50,000 or twenty-five percent of an individuals earnings – whichever is the highest figure – from April next year.
However, following increasing pressure from those opposed to the idea; it is believed that the Chancellor will consider introducing the changes over a two or three year period, to give charities time to prepare, as requested by ministers.
Further signs that the Chancellor could be about to soften his stance on his tax relief proposals, came yesterday when the Prime Minister, speaking at a press conference during his tour of Indonesia promised he would “look very sympathetically” at the concerns raised by charities about losing big donations.
David Cameron said: “There's no doubt abuse is taking place. Some people have been using charities established in other countries to funnel money into those so they're not paying 50p tax or even 45p tax but in some cases are paying 10 or 20 per cent tax. I think that isn't right.”
Despite David Cameron promising to look at the concerns raised by charities in regard to the tax relief cap, Downing Street sources denied that a climb-down had been issued, saying that the Prime Minister and the Chancellor were united in wanting to achieve the goals of increasing charitable giving whilst making sure the tax system isn’t abused; although it is thought the original proposals will now be “tweaked” in an attempt to allay the charities fears.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3.1 / 101 )A joint study by the Association of Chartered Certified Accountants (ACCA) and Manchester Business School has concluded that British taxpayers are “rarely” benefiting from public-private partnerships (PPP).
The report from the joint study, which is set to be published later today, has revealed that nearly thirty years after the government turned to the private sector to help build the Channel Tunnel in a bid to boost trade, the hybrid projects – which are more expensive and no more efficient than government-procured projects – are still failing to provide value for money.
The findings are set to come as a blow to the government process – which has £29.9 billion of PPP liabilities on the balance sheet – as it had specifically set “value for money” as the main objective for both PPP and its successor programme, Private Finance Initiatives (PFI).
Professor Graham Winch, from Manchester Business School, said: “The value-for-money case for PPP in the public sector has yet to be proven.
“The benefits gained from the availability of 'extra' finance, the transfer of risk from public to private sector, and improvements in decision-making processes are too nebulous to provide any certainty that they outweigh all the known problems.
“PFI has undoubtedly allowed the UK to acquire more social infrastructure earlier, and this has stimulated short-term economic growth, but it has led to an overhang of debt in the shape of commitments to unitary charges stretching some 30 years into the future and constraints on the flexibility of public bodies in using their infrastructure.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 131 )A confidential study by HMRC has revealed that some of the country’s richest are using aggressive avoidance schemes to reduce their income tax rate to an average of ten percent – less than half the level paid by the average taxpayer.
Following the study, the Chancellor George Osborne is set to target millionaires, to ensure they pay tax on more than a third of their earnings.
As part of his crackdown on millionaires, the Chancellor has unveiled proposals which will mean that from next year, the total amount of tax relief any individual can claim will be limited to twenty-five percent of their income or £50,000 – whichever the greater value is.
The Chancellor personally studied the anonymous copies of the tax returns submitted by some of the wealthiest in the country, as part of the HMRC study, and admitted he was “shocked” by the number of people who have organised their finances in an effort to avoid paying income tax.
He said: “I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs, and to be fair it’s within the tax laws, so that they were regularly paying virtually no income tax. And I don’t think that’s right.
“I’m talking about people right at the top. I’m talking about people with incomes of many millions of pounds a year.
“The general principle is that people should pay income tax and that includes people with the highest incomes.
“I’m not allowed to be shown the names of the individuals but I’ve sat with the most senior people at the Inland Revenue, the people who run some of the high net worth units there. They have given me examples, anonymised examples, and so we are taking action.”
Despite the Chancellor admitting the Treasury are taking action to prevent people from avoiding paying income tax, their proposals have been heavily criticised, with claims they will lead to philanthropic giving.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 2.8 / 117 )It has been revealed that tax and benefit changes which come into force from tomorrow are set to affect millions of families across the UK.
The changes, which were announced over the last eighteen months and have been described as a “tax bombshell” include a reduction in the income limit for child tax credit, alongside an increase in the number of hours couples with children have to work to be eligible for working tax credits – and it has been estimated that these changes will result in families with children losing on average £511 a year.
It has also been reported that the figures, from the Institute of Fiscal Studies, suggest pensioners will be an average of £316 a year worse off from April 2014 once cuts to their tax free allowances announced in last month's Budget have kicked in.
Ahead of the changes coming into force, Labour's Shadow Scots Secretary, Margaret Curran MP described the changes as a "tax credits bombshell” adding: “I am calling on the Government to urgently think again, and I am calling on Michael Moore to up his game and do everything he can to stop this outrageous attack on families trying to do the right thing.”
Despite the claims that the changes will leave families worse off, the Economic Secretary to the Treasury has said that twenty-four million households would be better off as a result of the changes by £6.50 a week.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 95 )A new £600 million financial institution is set to be launched, to help fund the Prime Minister’s “Big Society”.
The Big Society Capital, which will fund the new scheme, will use a mixture of money from dormant bank accounts and main High Street lenders to fund investment in charities and social enterprises, in a move which the Prime Minister, David Cameron, has said will help tackle the country’s “deepest social problems.”
The initial capital for the big society fund comes from an estimated £400 million from bank accounts which have been dormant for fifteen years or more, whilst a further £200 million will come from Barclays, HSBC, Lloyds and RBS.
David Cameron has said of the new fund: “For years, the City has been associated with providing capital to help businesses to expand.
“Today, this is about supplying capital to help society expand. Just as finance from the City has been essential to help businesses grow and take on the world, so finance from the City is going to be essential to helping tackle our deepest social problems.
“Big Society Capital is going to encourage charities and social enterprises to prove their business models - and then replicate them.
“Once they've proved that success in one area they'll be able - just as a business can - to seek investment for expansion into the wider region and into the country.
“This is a self-sustaining, independent market that's going to help build the Big Society.”
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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