Parents who stopped receiving Child Benefit payments before 7 January 2013 do not need to take any action. However, parents who did not stop their payments until after 7 January, or who are continuing to receive Child Benefit, and with income over £50,000, must register for Self Assessment for the 2012-13 tax year by October 5, which will enable them to declare the Child Benefit received, pay the tax charge on time and avoid penalties for failure to notify HMRC on time.
This month the department has been sending letters to around two million higher rate taxpayers, including those affected by recent changes to Child Benefit. These are aimed at reminding them they must declare any additional income or register now for Self Assessment, if they have not already done so.
Those who did not receive any payments relating to the period after 7 January do not need to register for Self Assessment. However, people who fail to register could face a penalty of up to 100 per cent of the tax due, depending on the circumstances.
They might be able to come out of Self Assessment in future years if they, or their partner if they are the Child Benefit recipient, choose to opt out of receiving Child Benefit and avoid incurring the tax charge.
Apparently, over 400,000 people with higher incomes have already opted out of receiving Child Benefit payments and parents who want to do so should visit HMRC’s website or speak to their financial adviser.
For more information, speak to Glazers, Chartered Accountants in London or visit www.glazers.co.uk
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( 3 / 532 )The Bank of England has upgraded its growth forecast for the UK economy in the third quarter of the year to 0.7 per cent from the 0.5 per cent forecast in August’s Inflation Report.
Minutes from September’s meeting of the Bank’s Monetary Policy Committee (MPC) also show that the nine members voted unanimously to keep interest rates and quantitative easing (QE) on hold during the month.
Policy committee members Paul Fisher and David Miles had voted earlier in the year to restart the Bank's QE programme but decided to put their call on hold in July and August pending an assessment of future rate guidance adopted by new Governor, Mark Carney. At this last meeting they decided against further asset buying following signs of strengthening economic growth.
The MPC also chose not to repeat previous warnings that bond market yields were rising faster than the data warranted, a rise the Bank had previously worried might be a headwind to the recovery.
The minutes said that "promising" data over the past month meant output in the third quarter was likely to be around 0.7 per cent and also predicted that growth could strengthen further towards the end of the year.
"Over the month the evidence was consistent with a recovery at least as strong as that expected at the time of the August Inflation Report," the record of the meeting continued.
The Bank’s decisions came as no surprise to commentators, as Mr Carney’s ‘forward guidance’ published last month, pledged to keep interest rates low until the unemployment rate falls to 7 per cent, as long as inflation remains under control. The Governor has suggested that this could be as far away as 2016.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 2.9 / 533 )The Office for National Statistics (ONS) said yesterday (September 17) that the UK’s consumer price inflation (CPI) rate eased slightly in August to 2.7 per cent, down from 2.8 per cent in July.
According to the ONS, the figures “continue the trend of broadly steady inflation seen since spring 2012”, although the rate remains well above the Bank of England’s 2 per cent target.
However core inflation, or inflation that has volatile energy and food prices stripped out of it, is now running at 2 per cent, which is the lowest figure since 2009.
This indicates that there is some firming of inflationary pressure on the horizon, as long as the recovery and growth continues, although the horizon may still be some distance away.
The biggest contributions to the fall came from the transport sector and clothing industry, thanks to the lower cost of motor fuels and air transport, although this was partially offset by higher costs for furniture, household equipment and maintenance.
However, the figures mean that prices are still rising faster than wages, which rose by 1 per cent on average over the same period, and also mean that savers are left with little or no return on their cash.
In addition, the news on the other closely watched measure of inflation was slightly less reassuring. The retail price index (RPI) rate, which includes housing costs and is used for many pay negotiations, rose to 3.3 per cent from 3.1 per cent in July and was slightly ahead of forecasts for 3.2 per cent.
Commenting on both sets of figures, the Treasury said that the Government is aware that, although the economy is starting to recover, it accepts that times are still tough, which is why it has taken action to help with the cost of living.
For more information, please contact Glazers, Chartered Accountants in London or visit www.glazers.co.uk
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( 3 / 527 )An email sent in error yesterday (September 16) to political journalists instead of to party members suggests that the Liberal Democrats plan to tax people earning over £50,000 if they remain in Government after the next election.
Party officials scrambled to defend the incriminating document, saying it was “at least a year old” but have confirmed that Chief Secretary to the Treasury, Danny Alexander, will tell the Lib Dem conference today (September 16th) that taxes on the "very wealthy" will be a key party pledge at the 2015 election.
Mr Alexander will add that tax rises and spending cuts will have to continue throughout the next five year Parliament, despite recent signs of an economic upturn and will reportedly say that his party will ensure that those who have the most will continue to contribute the most.
According to Mr Alexander, while taxes on the very wealthy will be a central Liberal Democrat promise for the next Parliament, making sure that the very wealthy cannot avoid their taxes is “a job we are getting on with right now."
Finally it is reported that Mr Alexander will also announce that shareholders are to be stopped from using private equity firms to shield money from the taxman.
He is expected to say that the vast majority of private equity shareholders are exploiting rules that were originally designed to curb tax avoidance. By lending their firms cash, shareholders can effectively convert their liabilities on the subsequent proceeds from income tax, levied at 45 per cent for top rate earners to the corporation tax rate of 23 per cent.
For more information, speak to Glazers, Chartered Accountants in London or visit www.glazers.co.uk
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( 3 / 585 )As of today, (September 16), the UK’s 46 million bank customers will be able to switch bank accounts more easily and quickly; and could each save up to £600 in the process.
Under the new Current Account Switch Service, customers will be able to switch accounts in just seven days, rather than the previous 18 to 30 working days, and now some banks are even offering cash ‘bribes’ to get customers to swap.
In a move that has been described as “long overdue”, the new bank will take responsibility for the account move, with the old account closing automatically once the change is complete.
Around 33 banks and building societies are involved in the initial phase and many are gearing up to fight over customers with a number of different enticements.
Commentators are delighted that the banks will have to ‘up their game’, as customers will no longer be a captive audience in the grip of a system that was outdated and complicated.
Previously it has been suggested that customers were afraid to switch accounts in-case important direct debits and standing orders, such as for mortgage payments or rent, would be disrupted, or worse still, fail.
Now, however, by just filling out two forms, account holders will have the peace of mind that a redirection service will capture any payments made in error for 13 months from the switch date.
The overhaul was included in recommendations by the Independent Commission on Banking, the body set up by the Chancellor, George Osborne, to boost competition in the sector.
Research by the Commission found that people on average changed their bank only once every 26 years because they viewed a move as difficult and complicated, resulting in a lack of competition that brought high charges and, in many cases, bad service.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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