In its quarterly forecast, the British Chamber of Commerce has predicted that the UK economy will grow by 0.6% rather than the 0.8% it had previously forecast, warning that the UK’s economy still faced serious challenges with debt levels that are too high and unemployment set to rise to almost three million by the start of next year.
John Longworth, the Director General of the British Chamber of Commerce has urged the Chancellor, George Osborne, to “pull out the stops” in the budget to help drive growth, saying: “Our economic forecast underlines the need for the Government to deliver a Budget that will bring confidence to businesses.
“Businesses up and down the country are doing their utmost to find new markets and grow their firms, despite the difficult economic challenges they face. Only the private sector will drive recovery and help deliver public services, like education, healthcare and pensions.
“A sustainable recovery depends on creating the right conditions to empower businesses to drive growth. Companies need the best possible environment to generate wealth and create jobs.
“The Government must stick to plan A, but also stimulate growth within the economy. There is room within the current spending envelope for measures that will encourage firms to export, invest and grow.”
The quarterly forecast, from the British Chamber of Commerce, has also warned that growth is likely to be lower than expected in the second quarter of 2012 due to the extra bank holiday in June for the Queen’s Diamond Jubilee; whilst in July and August there could be unusually high growth figures due to the Olympics.
It added that growth from exports and business investment will prevent the UK from falling back into a recession this year, with prospects set to improve further in 2012, when the British Chamber of Commerce predict the economy will expand by 1.8%.
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( 3 / 123 )A recent report has found that tax payers, because they are failing to tackle their tax bills, are giving away on average £421 each per year, to the taxman.
By failing to claim tax credits and use tax allowances, taxpayers are missing out on £12.6 billion each year, with the biggest area of waste being tax credits. This includes child tax credits, working tax credits and pension credits, which the report claims more than £7.26 billion went unclaimed in the last year.
Other big areas of waste are tax relief on pension contributions at £2.4bn, tax relief on charity donations at £2.4bn and making use of ISAs at £403m; whilst it is believed that up to eighty-five percent of taxpayers haven’t done anything in the last twelve months to reduce the amount of tax they pay.
The chief executive of the company behind the report, said following the findings: “Looking back at the last decade and the tax wastage figures in our reports, the numbers are just as shocking now as they were then.
“'The message is clear – tax affects pretty much every one of us, and with an average of £421 up for grabs for each taxpayer, we should take some time and effort to ensure that we are being as tax efficient as possible.”
In total, over the last decade, £88.6 billion is reported to have been handed unnecessarily back to the taxman.
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( 3.1 / 113 )Over five hundred business owners and entrepreneurs have warned that the fifty pence tax rate is damaging the economy and delaying the recovery from recession.
In a letter to The Daily Telegraph the small and medium sized business owners have said that the tax rate has prevented them from expanding their business and taking on more staff; adding that the levy is reducing government incomes and damaging the economy, rather than assisting its recovery.
Within the letter, the business owners not only accuse the Chancellor, George Osborne of “putting populist politics before sound economics” but they are also calling for the levy to be scrapped in next months budget.
The 537 business owners who signed the latter say: “Given the current state of the UK economy, we urge the Chancellor to urgently consider scrapping the top rate of tax in his forthcoming budget.
“The tax, which is in effect a fifty-eight pence tax after national insurance is taken into account, puts wealth creators like us in a very awkward position, penalising high earners through an unfair, politically motivated tax puts populist politics before sound economics.
“The result is that the fifty pence tax is set to reduce government income, and damage the economy, the public services and charitable giving.”
Despite the letter from the business owners, the Shadow Chief Secretary to the Treasury, Rachel Reeves, has claimed that now is not the time to do away with the fifty-pence rate, saying: “When millions of families and pensioners on middle and low incomes are being squeezed by the VAT rise and cuts to tax credits, cutting taxes only for the richest 1% cannot be the right priority now.
“But these business owners are right to call on the government to take action to stimulate growth and jobs in our economy.”
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( 3.1 / 135 )A glitch in the tax office’s computer system means letters demanding a penalty fee for late tax returns has been sent out in error to thousands of homes across the UK.
It has been estimated that up to 17,000 people will receive the letter, demanding the penalty fee of £100, in error, which states that if recipients do not pay the fine debt collection agencies will be sent.
The letters also warn that anyone who is three months or more late in filing their tax returns will face a second fine of £10 per day for up to three months, followed by an additional fine of five percent of the full tax bill after a six month period.
A spokesperson for the taxman has said that the letter mix-up has affected anyone who paid online between December 14th and December 16th 2011, adding: “We have cancelled the penalties and apologise to those affected. If these customers check online, they can see their payments have been correctly credited to their account.”
It has been reported that HMRC are already set to make £85 million from the 850,000 taxpayers who missed the February 2nd 2012 deadline.
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( 3 / 117 )The Treasury has closed two “aggressive” tax loopholes after a leading bank tried to avoid paying more than £500 million.
The move from the Treasury is the first time to Coalition government has clawed back taxes which have been avoided in the past, and the closure of the loopholes will also ensure billions of pounds in tax are paid in future.
One of the schemes which has been closed down involved a bank avoiding corporation tax on profits it made buying back its own IOU-notes; and the Treasury said it will move to block the recent use of the scheme by the bank and by any other company.
The second scheme involved investment funds trying to receive tax credits from the Treasury on non-taxable income; and the government yesterday brought in legislation to block any future use of the scheme.
David Guake, the Exchequer secretary said that the government was clear that “businesses must pay the tax they owe, when they owe it.”
He added: "The Government wants to ensure that the tax system is fair for all and we will not allow those who seek to benefit from this aggressive avoidance to get an unfair advantage.
“We do not take today's action lightly, but the potential tax loss from this scheme and the history of previous abuse in this area mean that this is a circumstance where the decision to change the law with full retrospective effect is justified."
Tax avoidance - unlike tax evasion - is not illegal but the UK's major banks have agreed to a code of practice to pay their fair share with the government.
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