Developments from August 2008
29 August 08
Rubble rebels
British landlords are reportedly demolishing properties to avoid paying a tax
on empty commercial buildings introduced in April. The levy was intended to
increase the supply of property and cut rents. Building Design
28 August 08
Taxman embarks on ad blitz
The taxman is set to launch a £5 million advertising blitz to advise taxpayers
of the new self-assessment deadline. Taxpayers completing returns by hard copy
will need to submit documentation by 31 October, three months earlier than in
previous years. HM Revenue & Customs begins the major campaign to advise
taxpayers in October. According to an HMRC spokesman, the ad campaign will
encompass financial and mainstream press outlets and local radio broadcasters
among other forms of multimedia. “There won’t be a man, woman or child who
won’t know about the new deadline,” the spokesman said. The promotion will also
herald a new face to front the campaign, thought to be former BBC newsreader
Moira Stuart. Pressed on why September just weeks from the deadline was
chosen for the launch of the campaign, the spokesman said it was a prime time
in the tax cycle. Accountancy Age
27 August 08
Stamp duty indecision has caused worst of all possible
worlds – Cable
Commenting on today’s moveme.com survey which shows that 80% of homebuyers are
putting back their moving date in case the Government introduces a stamp duty
holiday, Liberal Democrat Shadow Chancellor, Vince Cable said: “The Government
has created the worst of all possible worlds.” M2 Presswire
25 August 08
Crackdown leaves taxpayers unprotected
HM Revenue & Customs inspectors are to gain new powers to investigate and
fine taxpayers, but safeguards for individuals and businesses will not come
into effect until at least four months later. Accountancy and tax bodies said
the “get tough” regime should be delayed until a charter is in place to protect
taxpayers. They also argued the charter should be a statute, similar to a bill
of rights, rather than the currently proposed statement of good practice. HMRC
will acquire powers next year to enter business premises and private homes used
for business. For errors that are “careless, but non-deliberate”, penalties
worth up to 30% of an unpaid tax bill can be levied. Fines worth 70% of the
final tax bill could be imposed should officials believe the taxpayer
deliberately ignored the need to make a payment. Deliberate concealment could
trigger fines worth 100% of the final tax bill. The new powers, outlined in the
Finance Act, are due to come into effect on
24 August 08
Bonanza for tax dodgers
Tax dodgers will escape owing millions of pounds in unpaid bills and the
Government will be left with a widening hole in its finances after a jobs cull
at Revenue & Customs, civil servants have warned. Plans to axe 12,500 staff
and close a third of regional offices will amount to a charter for tax dodgers,
according to unions representing tax collectors. The cuts will make it easy for
small-scale tax evaders, such as those in the black economy, to avoid
detection, unions have warned. One union source said: “When you multiply each
unpaid tax bill, the Government will lose a very large sum.” The Association of
Revenue and Customs (ARC), representing senior officers, and the Public and
Commercial Services Union (PCS), for rank and file staff, have criticised the
cuts, under which 12,500 jobs and 200 offices will go by 2011. “What we are
seeing is the economics of the madhouse,” said a PCS spokesman. “It is
ludicrous that tax that could fund vital public services is going unpaid
because of arbitrary targets to slash jobs. With a tax gap of billions, the
priority of Revenue & Customs and the Government should be ensuring the
integrity of the tax system and that everyone pays their fair share.” The
Revenue has estimated the “tax gap” – the difference between taxes owed and
taxes paid – at between £11 billion and £41 billion a year. ARC president Terry
Cook said: “The top end of tax avoidance, the complex schemes with which our
members will be dealing, is damaged more by a general lack of investment in the
Revenue than the office closure programme. But at the lower end, where you are
dealing with a much larger number of people avoiding smaller sums of tax, there
may well be negative effects. There, you are likely to lose things such as
local knowledge.” The Revenue rejected the claims, stating that quality of
staff and of intelligence was more important than sheer numbers of people
employed in tackling tax dodging. Mail on Sunday
19 August 08
Lords urge tax reform to end “throwaway culture”
The House of Lords science committee called on Tuesday for VAT rates to be
reformed to make sustainable consumer goods “more economically attractive” as
part of a bid to end
18 August 08
Brown urged to tax top earners
Gordon Brown was urged by one of his ministers yesterday to consider a new tax
on top earners to help ordinary families through the economic downturn. Health
Minister Ivan Lewis said the Government needed to show it could come up with
practical measures to support people at a time of global uncertainty. Writing
in the Sunday Times, he said voters expected a Labour government to
reward hard work by protecting their quality of life. Ministers, he said,
should be prepared to target help for the struggling middle classes as well as
the lower paid. “Our duty is to act decisively and make sure we understand what
it is like to cope with rising food, fuel and utility bills,” he said. “If as a
result of the current economic situation the only way to help hard-pressed
middle-class families is to ask the highest earners to pay more, then serious
consideration should be given to that.”
13 August 08
US set to crack down on tax
Most businesses in the
11 August 08
Fears over stamp duty fiasco
Companies across the mortgage industry say government indecision about whether
stamp duty should be suspended will prolong the turmoil affecting the housing
market. Last week estate agents and IFAs called on the Treasury to take
decisive and urgent action on the issue. Paul Smith, chief executive of estate
agent network Spicerhaart, says: “If the Government allows speculation over a
stamp duty holiday to continue it will have a market crash on its hands.
Anxious buyers will hold off in the hope that the rumours are confirmed and
property chains will fall apart as a result.” Smith adds: “This procrastination
will have a devastating effect on house prices, which have already decreased by
15% this year.” Mortgage Strategy
8 August 08
Ministers and union call for reversal of planned 4x4 tax
hike
Ministers on the Environmental Audit Committee have called on the Government to
reverse its decision to increase car tax until a proper impact assessment is
carried out. Committee member Graham Stuart has called for vehicles, including
4x4s, to be exempt from the rise which is set to incur significant costs for
farm businesses. In a Minority Report released this week, Mr Stuart noted that
the Treasury has not carried out any modelling of the proposed rises, calling
it a “cavalier attitude” to environmental taxation. He points out that retrospective
changes would hit all heavily polluting vehicles bought before March 2001,
adding additional costs to businesses and low-income families as well as
damaging the resale value of such vehicles. In his report, he says: “Given the
impacts of the credit crunch, inflation and the reduction in disposable incomes
it is important the Government is sensitive to the financial difficulties
facing most families and the application of significantly increased vehicle
excise duty rates has not been properly analysed. It is not clear how the
committee can welcome the VED changes when even the Treasury does not know
whether they will achieve what they set out to do.” The NFU also joined the
debate, writing to the Treasury asking for a derogation from any increase for
genuine working farm vehicles. Farmers and growers in upland areas, where there
is no option but to use a 4x4, would be particularly hit by the increase which
could see their car tax rise from £210 to £440. NFU deputy president, Meurig
Raymond, said: “These 4x4 vehicles are essential working tools for many farms
and the proposed re-banding will see them unfairly disadvantaged.” Farmers
Guardian
7 August 08
Treasury denies stamp duty plan
Suggestions that the government has put forward a proposal
to let home buyers delay stamp duty payments are “simply wrong”, the Treasury
has said. On Tuesday, Chancellor Alistair Darling did not rule out that the tax
could be changed to free up the housing market. The Tories accused him of
playing “short-term games” while estate agents have also been critical. But the
Treasury said the story had been “speculation” and a “number of options” were
being looked at. BBC.co.uk
Lib-Dems split over local tax
Nick Clegg faces a Liberal Democrat split over local
income tax plans that carry huge implications for Londoners. Treasury spokesman
Vince Cable wants to ditch the long-standing commitment that would benefit
pensioners but cost the middle classes hundreds of pounds extra. Instead he
wants to reform the council tax system and make its replacement a medium-term
goal. Evening Standard
6 August 08
“Unfair taxation must end”
Campaigners are calling on the Government to change a rule
which will force a number of families to pay bigger inheritance tax bills. The Low
Incomes Tax Reform Group (LITRG) has highlighted that widows and widowers will
be penalised for the death of their spouse at a young age because the
Government refuses to amend recent laws. Those who died before April 1975 will
not be allowed to enjoy their “nil rate tax allowance”, the amount of an estate
which is not liable for inheritance tax, and which currently stands at
£312,000. The Government changed the rules on
5 August 08
UK Chancellor of the Exchequer Alistair Darling fuelled
speculation Tuesday that the Government may reduce the tax levied on house
purchases as part of a package of measures to breathe life into the moribund
Stamp duty to be scrapped in bid to kick-start economy
Stamp duty is to be temporarily lifted by Gordon Brown in
an attempt to kick-start the housing market, it was reported last night. The
measure was said to be part of plans being put together by the Prime Minister
and key officials to rescue the flagging economy. It was also reported Mr Brown
hopes the package will help reverse poll results which have shown voters losing
confidence in his ability to lead the country out of the economic downturn.
Ministers believe stamp duty is putting off buyers and leaving the housing market
flat. Daily Express
4 August 08
Hundreds of home-owners in
1 August 08
Empty property tax rebellion
The Government is facing a backbench rebellion over its
decision to impose the full £1.4 billion cost of commercial property rates on
empty buildings. More than 35 MPs led by Linda Riordan, Labour MP for