Having recalculated earnings in its annual PAYE End of Year Reconciliation process for 2012-13, the department has now begun the laborious task of contacting the people who either under or over paid. However, as there are so many people to speak to, some taxpayers will not find out whether they are due a refund or have to fork out more money until October.
Of the 5.5 million people, some three and a half million are due a refund of between £350 and £500, while the balance will be asked to make up an average shortfall of between £400 and £500, although the taxman has said he is happy to wait until the 2014-15 tax year for it to be repaid.
A spokesperson for HMRC said that around 85 per cent of PAYE taxpayers pay the right amount of tax throughout the year but if their circumstances change during the 12 months, such as if they move jobs, then a recalculation has to be made.
He added that this is the normal process that the PAYE system has used since it was set up some 70 years ago. Of course, the hope is that with the introduction of reporting payroll information in real time, commonly called RTI, which started for most employers this April, these recalculations should be a thing of the past. It could be interesting to see whether the taxman needs to get in touch this time next year.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 2.5 / 4 )The Bank of England yesterday (May 15th) upgraded its economic growth forecast for the UK and has said that inflation should now fall faster than it had previously predicted.
The Bank’s Governor Sir Mervyn King said that inflation should drop to its target of 2 per cent within two years, whereas the previous prediction was for inflation to fall to 2.3 per cent in the same period.
As a knock-on, economic growth is likely to be higher than 1 per cent, which is up from the Bank’s previous prediction of 0.9 per cent, although the underlining picture remains “weak by historical standards”.
Sir Mervyn said he was happy to be able to announce the news as his parting shot, as he hands over the Governor’s mantle to Canadian Mark Carney in just over six weeks.
He also supported Chancellor George Osborne’s economic strategy, saying that the UK “would be well into recovery” had global growth been around trend and attacked the International Monetary Fund’s “quibbling” over the Chancellor’s austerity programme.
Meanwhile data from the Office for National Statistics (ONS) showed that while unemployment rose by 15,000 in the first quarter of 2013 to 2.52 million, the number of people claiming Jobseekers’ Allowance fell by 7,300 last month to 1.52 million.
In addition, average earnings, excluding bonuses, grew by just 0.8 per cent over the year, which is the lowest rate of increase since the ONS began reporting the figure in this current format 12 years ago.
Sir Mervyn also commented on unemployment and revealed that the Bank expects it to fall “by only a little” from the current level of 7.8 per cent over the coming year.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 5 )HM Revenue & Customs (HMRC) has published its second list of ‘deliberate tax defaulters’, which contains the names and financial penalties of individuals and small firms.
The original list HMRC, which was published in February, caused an outcry as it focused on small businesses and individuals who between them only owed £1.45m in unpaid taxes and fines, while corporations were perceived as ‘getting away with’ multi-millions.
This time the firms and people on the list owe £4.6m and there are some bigger names including, sending a clear warning that the taxman will come after anyone who deliberately evades tax.
The department is allowed to publish the names under the Finance Act 2009 and is part of HMRC’s approach to combating tax evasion and non-compliance.
Jennie Granger, Director General for Enforcement and Compliance, said that the department will publish the names of tax cheats every quarter and added that anyone who is thinking about avoiding their responsibilities should therefore consider the consequences before they refuse to tell HMRC about their full tax liability.
According to the taxman, publishing these names encourages defaulters to make a full and prompt disclosure and cooperate with HMRC to avoid being named, as all the named defaulters have exhausted the appeals process.
The information may be published once the taxman has carried out an investigation and the person has been charged one or more penalties for deliberate defaults on tax of over £25,000.
However, the department says that information will not be published if the person earns the maximum reduction of the penalties by fully disclosing details of the defaults – the implication being that those who co-operate with the department could retain anonymity.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3.2 / 9 )According to the Royal Institution of Chartered Surveyors (RICS), demand for housing in the UK rose to its highest level in nearly three and a half years last month (April).
The latest RICS Residential Market Survey published today (May 14th) suggests that the Government’s Help to Buy scheme has begun to make an impact on the housing market.
Last month, new buyer enquiries rose to their highest level since 2009, with 25 per cent more chartered surveyors reporting that demand for property rose rather than fell.
The jump in enquiries last month, up from 13 per cent more in March, strongly suggests that along with the existing Funding for Lending scheme, Help to Buy is attracting interest, even if the mortgage guarantee element of the product is not due to come into effect until next year.
Help to Buy was announced by the Chancellor, George Osborne, in his March Budget. Under the scheme, the Government committed £3.5bn over the next three years to shared equity loans for new-build homes, allowing buyers to purchase them with a 5 per cent deposit.
The scheme will also guarantee £130bn of mortgages from 2014 for three years, allowing banks to provide more loans to people who cannot save big deposits.
The RICS survey went on to say that, as demand increased so did supply, with new instructions to sell rising in April to a net balance of 8 per cent. With not enough housing to meet increased demand, prices are beginning to improve, and the survey recorded its first positive reading for house prices since June 2010, albeit only marginally, at 1 per cent.
In addition, other good news for the housing market came from the Halifax building society, which said last week that prices had increased by 1.1 per cent in April from the month before, making it the strongest growth since last November.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 10 )The first comprehensive report since the 1970s on small and medium-sized enterprises (SMEs) has been published by Lord Young, the Prime Minister's enterprise adviser.
In the report, the peer says that expanding the start-up loan scheme and opening a further £230bn worth of government contracts to micro businesses will help thousands of new firms get off the ground, boost growth and transform the economy.
In this, his second report on expanding the smallest businesses with fewer than 10 employees, which make up 95 per cent of businesses in the UK, Lord Young recommends removing the age cap, currently set at 30, for start–up loans and providing a greater role for business schools in their local economies.
Lord Young also wants to see legislation introduced to abolish pre-qualification questionnaires on contracts under £200,000 and the setting up of “single market” principles that suppliers can expect when doing business with the public sector.
Various business organisations including the Confederation of British Industries (CBI) and the Federation of Small Businesses (FSB) have welcomed the report.
The CBI said that Lord Young rightly identifies that the Government needs to earmark funding to effectively market existing finance and support schemes, as most firms simply do not know what is available, so the new Business Bank will play a crucial role in raising awareness.
The group also supports the recommendation to open up more government contracts to smaller firms by cutting out the requirement for them to complete a pre-qualifying questionnaire, as most smaller firms do not have the capacity to handle this.
However, the FSB questioned whether the schemes were capable of fundamentally changing the small business landscape, and said they might add further complexity to an already crowded business support market.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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