HMRC sends VAT MOSS reminder

From 20 October businesses supplying digital services across the EU can register for the new VAT Mini One Stop Shop (MOSS), said HM Revenue & Customs (HMRC).

The service is designed to save suppliers from having to register for VAT in every EU state where they do business. It is expected that up to 42,000 businesses will register for the service.

Chris Chown of AccountingWEB.co.uk warned: ‘This will be expensive and impractical for small businesses. An alternative would be for small businesses to register voluntarily for VAT in the UK and take advantage of the new MOSS, but this would give rise to a VAT charge on all their supplies in the UK’.

Chairman of the Institute of Chartered Accountants in England and Wales (ICAEW) Tax Faculty, Rebecca Benneyworth, said: ‘Small businesses in the UK who are not registered for VAT have a difficult decision to make’.

The new MOSS will be useable from 1 January 2015 for businesses that have registered.

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Tax powers to be devolved to Welsh government

24 Sep 2014

Finance Minister for Wales, Jane Hutt, has revealed plans for an initiative to allow the Welsh government to collect its own taxes for the first time since the 13th century.

The Welsh government has been unable to vary taxes or borrow money, instead receiving its budget from the Treasury. However, powers over business rates, stamp duty land tax and landfill tax are now due to be devolved to it.

Ms Hutt announced that a Welsh Revenue Authority, responsible for ensuring taxes are collected, would be created. She said that Wales would be able to “shape taxes which are better suited to Welsh circumstances and proposals”.

A consultation will run until 15 December, with a bill due to be published next July and the new powers due to begin in 2018. There will also be a ‘taxpayers charter’ designed to outline the rights and responsibilities of both citizens and the authorities.

An inquiry called the Silk Commission, set up last November by the UK Government, recommended devolving tax powers to Wales, including authority to vary a portion of income tax by the year 2020 if approved by a referendum.

Meanwhile, support for Welsh independence has fallen to its lowest recorded level, according to a poll for BBC Wales.

The survey, carried out soon after Scotland voted to remain in the Union, found that only 3% of Welsh citizens wanted to Wales to be independent. However, there was more support for the idea of more powers being devolved to the Welsh Assembly, with 49% in favour.

Research shows tax evasion passing £80 billion

23 Sep 2014

The Public and Commercial Services Union (PCS) and Tax Research LLP have released findings of their probe into tax evasion and avoidance.

The total tax gap, which is ‘the difference between the tax that should be paid in the UK if the tax system worked as parliament and HMRC intended, and the amount actually paid’, is estimated to be over £119 billion in total for 2013/14.

According to the PCS, tax evasion cost the UK £73.4 billion in 2011/12, while official Government figures put losses from tax evasion at a mere £22.3 billion.

The PCS 2013/14 prediction is that tax evasion now stands at £82.1 billion. Over half of this figure is down to trading in the shadow economy.

The rest of the tax gap was accounted for by tax avoidance – defined as ‘tax that is lost when a person claims to arrange their affairs to minimise tax within the law in the UK or in other countries’ – at an estimated £19.1 billion; and also unpaid tax debt which amounts to £18.2 billion.

The report can be found here, and shows that tax avoidance totals actually dropped in 2013/14 compared to £25 billion in 2008. £25 billion was also the estimated figure for unpaid tax debt in 2008, which has also dropped significantly.

Labour leader promises NHS with no tax increase

22 Sep 2014

Ed Miliband has made a pledge to protect the NHS from its funding crisis without raising taxes ‘for everyday working people’.

He spoke on the BBC’s Andrew Marr show. While reinforcing his promise to bring back the 50p top tier income tax rate, and a levy on homes with a value over £2 million, he said there would be no increase in national insurance.

‘I am deeply worried about the NHS in the next parliament,’ he said. ‘We are certainly going to make sure the NHS does not lose money and we want to do more than that. We will be saying more about that between now and the election’.

If elected to power next year, Labour also promise to strengthen GP services and repeal the Health and Social Care Act. Mr Miliband said: ‘We are going to put the right values back in the NHS’.

Shares and sterling rise after Scotland votes ‘No’

Shares and sterling rise after Scotland votes ‘No’

19 Sep 2014

The FTSE 100 share index and the pound have both risen following Scotland’s rejection of independence in yesterday’s referendum

After several weeks in which the pound had fallen amidst fears that Scotland would vote to exit the Union, sterling hit a two-year high against the euro and also jumped nearly 0.8% against the US dollar.

Meanwhile, the FTSE 100 share index opened 0.7% higher, rising to 6,860.

Shares in RBS were up more than 3% as the bank confirmed it would not be moving its registered head office now that Scotland had determined to remain part of the UK.

An RBS press release stated: “The announcement we made about moving our registered head office to England was part of a contingency plan to ensure certainty and stability for our customers, staff and shareholders should there be a ‘Yes’ vote. That contingency plan is no longer required. Following the result it is business as usual for all our customers across the UK and RBS.”

Lloyds Banking Group, whose shares opened nearly 2% higher, stated: “The group is proud of its strong Scottish heritage and remains committed to having a significant presence in Scotland. We remain fully focused on supporting households and businesses in Scotland as well as right across the rest of the UK.”

19 Sep 2014

The FTSE 100 share index and the pound have both risen following Scotland’s rejection of independence in yesterday’s referendum

After several weeks in which the pound had fallen amidst fears that Scotland would vote to exit the Union, sterling hit a two-year high against the euro and also jumped nearly 0.8% against the US dollar.

Meanwhile, the FTSE 100 share index opened 0.7% higher, rising to 6,860.

Shares in RBS were up more than 3% as the bank confirmed it would not be moving its registered head office now that Scotland had determined to remain part of the UK.

An RBS press release stated: “The announcement we made about moving our registered head office to England was part of a contingency plan to ensure certainty and stability for our customers, staff and shareholders should there be a ‘Yes’ vote. That contingency plan is no longer required. Following the result it is business as usual for all our customers across the UK and RBS.”

Lloyds Banking Group, whose shares opened nearly 2% higher, stated: “The group is proud of its strong Scottish heritage and remains committed to having a significant presence in Scotland. We remain fully focused on supporting households and businesses in Scotland as well as right across the rest of the UK.”

Inflation down to 1.5% in August

17 Sep 2014

The Office for National Statistics (ONS) has released figures showing that fuel and food prices fell, contributing to an expected drop in inflation last month.

Considering the months of July and August, the ONS said: ‘Petrol prices fell by 1.8% between the two months this year, compared with a rise of 2.0 pence per litre a year ago. Prices of food also fell this year but rose a year ago, particularly in the milk, cheese and eggs category’.

By contrast, clothing, transport services and alcohol have continued their upward trend. ‘The main effect came from price rises on women’s outerwear’, said the report. ‘Within transport services, the upward effect came from sea and air transport and within alcohol it came from spirits and wine’.

The Bank of England (BoE) set a target for inflation of 2% this year, with slow price growth keeping it well below that figure, and keeping the BoE from raising interest rates.