David Cameron said the situation could leave countries like Britain “staring down the barrel”.
Mr Cameron’s concerns are matched by politicians, bankers and investors who are becoming increasingly worried that Government debts are dragging down the world’s economy, which could see the world’s biggest economies sliding back into a recession.
Mounting gloomy economic data has accumulated this week, with stock markets around the world falling sharply again and the FTSE-100 seeing its biggest drop for more than two years.
The Prime Minister was speaking in Ottawa, where he also warned that political indecision would only worsen the financial crisis.
“We're not quite staring down the barrel, but the pattern is clear," he said "Growth in Europe has stalled, growth in America has stalled."
Earlier this week, Mr Cameron also penned an open letter to US and European leaders, which was signed by leaders from Australia, Canada, Indonesia, Mexico and Korea.
“Barriers to action are now political as much as economic. We must send a clear signal that we are ready to take the actions necessary to maintain growth and stability for all for the future,” the letter said.
Mr Cameron went onto criticise US and eurozone Governments for not doing enough to reduce budget deficits.
The letter said the US "needs to overcome the remaining hurdles towards restoring medium–term fiscal sustainability,” and eurozone Governments must “act swiftly” to restore markets’ confidence in the single currency and struggling countries.
Christine Lagarde, the International Monetary Fund’s managing director, also voiced her concerns at a meeting in Washington.
"The current economic situation is entering a dangerous phase," she said.
She also warned that the world was facing a prolonged crisis unless leaders could find the "political determination" to set the recovery back on track.
The Bank of England is expected to launch a new round of quantitative easing, printing new money, as soon as next month.
Sir Mervyn King, the Bank of England governor, sparked controversy this week by missing a key meeting of the IMF in Washington this week, sending his deputy, Charlie Bean, instead.
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 639 )Following action against doctors and plumbers, HMRC are now clamping down on tax-dodging private tutors.
After announcing success at narrowing the “tax gap”, private tutors are the latest group of professionals to be targeted by HMRC on their crackdown on tax avoidance.
The HMRC said they are beginning to win the fight against avoidance, evasion and fraud.
The tax authority said the gap – the difference between what was paid and what should have been paid - had fallen by £4 billion to £35 billion.
Private tutors’ tax arrangements are the latest target group in a long line of professionals and wealthy individuals to be scrutinised by the HMRC in order to tackle the problem of tax evasion.
HMRC are also drawing focus on tax avoidance among the super-rich, following the announcement that a team of “affluence” inspectors have been recruited to concentrate on individuals living in the UK with a personal wealth of more than £2.5 million.
However, attention will also be focused on low-level tax avoidance by private tutors. As the austerity cuts and high inflation rates take their toll on disposable incomes, a number of school teacher’s work as private tutors to supplement their incomes, and attention will also be on fitness coaches and horse riding instructors who may also do supplementary work.
A HMRC spokesman said the "vast majority" of those who could be classed as private tutors were "fully law-abiding citizens" who pay what they owed. But, he added, there was a "significant enough minority" for it to be concerned.
HMRC will be using cutting-edge tools such as "web robot" software to search the internet and find information about specified people and companies, and their financial affairs. It will then use this information "to pursue people who choose not to use the opportunities we provide for them to put their affairs in order on the best possible terms".
The campaign targeting doctors and dentists raised about £10 million and in HMRC’s most recent campaign, involving plumbers, the money is "still coming in".
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 653 )Following news that Britain “lost” £35 billion in uncollected taxes last year, HM Revenue & Customs has vowed to curb tax evasion by hiring a team of 2,000 tax inspectors to pursue wealthy tax evaders in the UK.
In a bid to close a £35 million tax gap, which is the difference between the amount of tax due and the total collected, HMRC will be targeting the 350,000 wealthiest people living in the UK whose wealth exceeds £2.5 million.
The extra tax inspectors being hired are to make sure that Britain's wealthiest are paying their full liabilities.
“The Government has made £917m available to HMRC to ensure that tax rules are adhered to across the board," HMRC said.
Danny Alexander, Chief Secretary to the Treasury, told Sky News that tax evasion and avoidance is “morally indefensible”.
Although the tax gap reduced slightly in 2009/10 to £35 billion, HMRC said there was “no room for complacency” when collecting what is owed.
Dave Harnett, HMRC Permanent Secretary for Tax, said: “The tax gap is the result of a wide range of behaviours and the challenges are constantly changing, but these figures show we are continuing to tackle non-compliance. The tax gap has reduced from 8.5 percent of total liabilities in 2004/05 to 7.9 percent in 2009/10 and we have almost doubled compliance revenue since 2005 to £14 billion.
“HMRC staff have worked very hard to deliver these figures and we are going to do everything we can to achieve even more.”
David Gauke, exchequer secretary to the Treasury, said: 'Although these numbers show continued progress by HMRC in reducing the tax gap, there is no room for complacency. Just in the last few weeks we have challenged offshore tax evaders, closed tax avoidance loopholes and created a new HMRC unit to ensure that the wealthier members of society pay their share.
“We will continue to take action to prevent a minority of rule breakers dodging their responsibility to pay the right tax at the right time.”
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 618 )The International Monetary Fund (IMF) has cut its growth forecast for the UK economy, predicting that the economy will expand by just 1.1 percent in 2011, rather than 1.5 percent as predicted in June.
The news will come as a blow to the Chancellor George Osborne. However, IMF had some advice for the Chancellor - ease the pace of deficit reduction in the event of any further downturn in activity.
The IMF signalled that Mr Osborne should also look to lowering his growth forecast for 2012.
When making tax and spending judgments, the Chancellor is currently guided by economic forecasts from the independent Office for Budget Responsibility. However, they have in the past proved to be over-optimistic.
The IMF also said the Chancellor may need to slow down the pace of his deficit reduction plans, although he has so far resisted in doing so.
The UK was hailed by IMF as one of the three big developed economies at risk of a double-dip recession, with the IMF World Economic Outlook claiming the global economy was entering a “dangerous phase”.
"Although the recession has ended, many economies continue to operate far below pre-crisis trends. Output losses relative to trends are largest for economies that were at the epicentre of the crisis, such as the United States and the United Kingdom," said the IMF.
The fund predicts that global GDP will expand "at an anaemic pace of 1.5 percent in 2011". And it believes global growth will shrink to 4 percent in 2012 from 5 percent in 2010 on factors such as "major financial turbulence in the eurozone".
"Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing," the IMF said.
The IMF's World Economic Outlook pinpointed the Japanese tsunami and the rise in oil prices prompted by the unrest in north Africa and the Middle East as two shock events to hit the international economy in 2011.
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 676 )Speaking at today’s Liberal Democrat conference in Birmingham, Business Secretary Vince Cable has vowed to tackle “the escalation of executive pay”.
Mr Cable said he wants an end to “payouts for failure” and that executive pay needs to become “more transparent” as it is often not linked to share values.
The Business Secretary proposed that shareholders should have more say on the wages executives receive. One option would be a discussion paper that would be aimed at limiting multi-million pound pay deals. Companies could also be required to set out the criteria used to determine pay and perks and putting employee representatives on remuneration committees.
“Further discussions” will take place regarding the paper being published next month, Downing Street said.
The Business Secretary also spoke of his regret for not doing enough to curb bank bonuses and said there needed to be a “narrowing of inequalities”.
Mr Cable also told the conference that he was consulting on the best way to tackle the escalation of executive pay, saying that it has “lost any connection with the value of shares, let alone average employee pay.”
He said: "It is hard to explain why shareholders can vote to cut top pay but the managers can ignore the vote.
"And surely pay should be transparent; not hidden from shareholders, and the public. I want to call time on pay outs for failure."
Earlier today, the Mr Cable told the BBC: "Executive pay has increased by over 400 percent over the last decade at a time when share prices haven't increased at all and basic pay of most employees hasn't increased at all."
Details of each executive board member's salary, pension, bonuses, and shareholdings are recorded but in separate parts of the annual report at present.
However, in October 2012, changes to the reporting requirements for all stock exchanged-quoted companies will come into force. They will be brought together in one table under the new system, with a total figure given to shareholders for the first time.
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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