Under the agreement, banks in the five countries will have to share information on the financial dealings of foreign clients in a bid to catch and deter tax evaders as well as to provide a template for a wider multilateral automatic tax information exchange.
The agreement is based on the US method of catching US tax evaders, commonly known as FATCA.
Describing it as a pilot scheme, the five finance ministers involved in the agreement have written to the EU Tax Commissioner, Algirdas Semeta, informing him of the deal and inviting other EU Member States to join in, in the hope that “the hiding places for those who seek to evade paying their taxes” are removed.
Exchequer Secretary to the Treasury, David Gauke, said that the agreement represents a “step change” in the Government’s abilities to crackdown on tax avoidance and evasion and builds on the recently signed agreements it has reached with the Isle of Man, Guernsey and Jersey.
Prime Minister David Cameron has said he is determined to put cracking down on tax evasion at the top of the G8 agenda, as the Treasury estimates that it costs HM Revenue & Customs (HMRC) £4bn a year in lost revenue.
In its statement announcing the new agreement, HMRC noted that Mr Cameron had indicated his intention of using the UK’s presidency of the G8 to “explore options for greater levels of tax information exchange, particularly on a multilateral basis”.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 515 )It has been reported that retail sales figures were down last month as plummeting temperatures hit demand for summer clothing, although consumers who wanted to stay in the warmth of their own homes bought more food and drink.
The British Retail Consortium (BRC) reported that like-for-like retail sales were up on those for March 2012 by 1.9 per cent, although down from February’s 2.75 rise.
However, the BRC sees the figures as “encouraging”, as both food and non-food sales were up on the year before by 2.5 per cent and 1.9 per cent respectively – and these increases marked the highest like-for like quarterly rises since December 2009.
Unsurprisingly, given the extremely cold spell, sales of duvets rocketed and house textiles generally was the best-performing category, although, perhaps surprisingly, growth in online sales slowed.
The quarter showed the slowest growth in online sales since August last year, rising by only 6.6 per cent in March compared with a rise of 13.9 per cent in March 2012. The BRC is suggesting this is because shoppers are researching products and prices online, before making their purchases in-store.
Meanwhile, out-of-town retail parks and shopping centres also recorded a higher than average decline in total footfall, with figures falling by 7.2 per cent in retail parks and 5.2 per cent in shopping centres.
Regional figures also show that the north and Yorkshire were the worst hit in regard to a fall in footfall, followed by the East Midlands, Scotland and Wales. London and the South-East were the regions most sheltered from the fall in shopper numbers.
The BRC’s findings were reflected by figures from the Office for National Statistics (ONS), which showed that sales volumes fell by 0.6 per cent last month.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 489 )Recent UK research into the thinking of UK’s small and medium-sized enterprises (SMEs) has shown that despite some signs of economic recovery, most are less optimistic than they were last year.
Having said that, one piece of research published today (April 8th) by an annual index suggests that privately-owned firms are planning to hire more staff over the next six months than they have for almost the past two years.
However, according to research carried out by the FT and Western Union Business Solutions (Wubs), only 29 per cent of SMEs thought that the business environment in the country would improve in the next six months.
The Wubs survey also found that 20 per cent forecasted that the economy would worsen and half predicted no change.
Meanwhile according to a new poll, only 34 per cent of respondents said they thought that the economic outlook would be better this year than last, compared with 48 per cent who thought that in February 2012.
The survey also reveals that 6 per cent of firms plan to make redundancies, which is double the number saying the same in 2012. In addition, 22 per cent are unsure about the prospect of redundancies, significantly more than the 10 per cent who said they were unsure about laying off staff this time last year.
Small firms also continue to report that Government help is lacking. This year, a total of 72 per cent of respondents to the survey said the Government will either not do enough or not do anything to support businesses in 2013.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 428 )Tomorrow sees the introduction of Pay As You Earn (PAYE) reporting using real time information (RTI), for all but the smallest firms, but there are fears that it could sound the death knell to cash-strapped organisations.
HM Revenue & Customs (HMRC) is bringing in RTI to prevent tax code errors caused by people moving from job to job throughout their working life and the department has said that its implementation will save around £300m a year in administration costs.
However, while large firms have payroll departments that have been preparing for its introduction for months, small firms are having to devote time and money they can ill afford to buying new payroll software and ensuring that each employee’s details, even for casual staff, are completely accurate.
In fact, some firms are so enmeshed in the minutiae of their business, they are still oblivious to it; a survey this week suggested that as many as one in five is unprepared for the change or even unaware that it is happening.
For this reason, HMRC announced recently that firms with 50 employees or fewer will not have to start reporting in real time until October, when Universal Credit will start.
The Chartered Institute of Taxation (CIoT) has gone so far as to rename RTI as the ‘Route to Insolvency’ for some small firms. The Institute has said that employers who are caught unawares in October will have a “nasty wake-up call” when HMRC debt management officers contact them. While other tax experts have predicted that the payroll costs for small firms could quadruple when it starts.
Also, many small firms use PAYE as a cheap source of finance by delaying payment to help with cash flow, which they will not be able to do from October. They will also have to pay for the software and for people to check employee details, not to mention the added paperwork that could be as often as daily if they employ casual staff.
The Institute is also not optimistic about HMRC’s track record in launching new systems successfully, nor communicating effectively about RTI to employers, who face heavy penalties if they make mistakes.
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 493 )Despite Government schemes and growing business demand for credit by small and medium-sized enterprises (SMEs), the high street banks are saying that they do not envisage credit availability to be changed from its current level in the coming quarter.
These are the findings of the Bank of England’s quarterly credit conditions survey of lenders, which showed that, although lending to firms did increase in the first three months of the year, the banks only lent to large companies.
They say that this is because SMEs are not applying for credit, but it may be because they do not expect a favourable response if they do.
The Bank’s survey shows that there will be “significant increases” in demand by SMEs in the coming quarter.
It is also hard to understand why the banks are not lending to SMEs when the rate of default on loans to firms of all sizes in the first quarter actually fell.
The lack of funds for SMEs is worrying business leaders and politicians and last month the Chancellor George Osborne told MPs that the state of the banks remains one of the “most acute” problems facing the economy.
The Government is trying to alleviate the problem with the introduction of the state-backed Business Bank, but critics point out that it is taking too long to be set up and that it may be under-funded.
Policy Director at the British Chambers of Commerce, Adam Marshall, said that the signs of growing business confidence must not be choked off by credit constraints and that the Business Bank must have the power to improve business access to finance.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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