.png)
.png)
News briefing, 28 Feb 2014
Avoidance & evasion
HMRC are challenging some of the UK’s biggest businesses over their accounting policies, as the department steps up its investigations into the potential underpayment of hundreds of millions of pounds of tax.
Financial Times
The tax department’s hiring of accounting specialists may be about to yield results. Heather Self of Pinsent Masons, the law firm behind the FT’s story, points out that companies will want to book loss relief as soon as possible, following the recession. The Revenue might not have had the accounting firepower to challenge firms in the past, but now it does.
Budget
The chancellor, George Osborne, is under pressure from Conservative MPs to use next month's Budget to announce pre-election tax cuts, to offset the prospect of a politically damaging rise in interest rates before polling day.
Financial Times
An interest rate rise would be unpopular with people with mortgages and loans, but popular with older and retired people who have paid off their mortgages and have seen years of minimal interest from their savings. Older people are more likely to vote.
Income tax & NI
National Insurance, the 100-year old charge on employers and employees, will be renamed earnings tax, the chancellor has signalled.
Telegraph
The proposal is included in a private members bill that allegedly has the chancellor’s support. The idea came from the Taxpayers’ Alliance, a low-tax pressure group. If the Daily Telegraph story is accurate, the government seem to have overlooked the pressure it will come under to remove ‘employers’ earnings tax’ because the name stresses the effect it has on jobs rather than the contribution it makes towards benefits.
The Treasury is examining plans to cut to the 20% tax on earnings from bingo to 15%, in line with online gambling and betting on horse races.
Mail
The Daily Mail spins the plan as a pro-working-class move by the government, but the reality has more to do with the forthcoming introduction of Remote Gaming Duty in December. The imposition of a 15% tax where previously there was none will do more for the bricks ‘n’ mortar bingo halls than just create a reduction in their rate of tax – although the changes come very late to help entertainment venues that have had to diversify to survive.
Property
A so-called mansion tax on expensive homes could impede business directors’ ability to secure bank loans, according to the Institute of Directors (IoD).
Times
The IoD believes a tax on expensive homes would reduce the value of the property, meaning the company director owners would not be able to borrow as much when they use their houses as security for loans. It is strange that inflation in consumer prices is seen as a bad thing, but asset price bubbles in property are not. How quickly people forget…
HMRC are set to raise £100m – five times more than anticipated – through the new annual tax on enveloped dwellings (ATED), designed to prevent stamp duty avoidance by wealthy property owners.
Mail
The willingness by some to pay the ATED suggests there is more to a desire to live in the UK than a low tax regime.
VAT
Bridge is not a sport, a tax tribunal has ruled, meaning clubs cannot qualify for a VAT exemption on members’ competition entry fees.
Times
The tribunal judge held that “sport normally connotes a game with an athletic element, rather than simply a game”. Like all VAT exemptions, the rules are ultimately part of EU law.
Brussels is likely to enforce higher VAT levels on an independent Scotland.
Times
If an independent Scotland were to negotiate its own membership of the European Union, VAT would have to be applied to items that are zero rated in the UK. The zero rates were agreed years ago, and the EU has since said no more zero rating will be allowed.
- Blog
Leave a comment