Despatches news - Money News

Scepticism over entrepreneur's relief -

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MPs among others are already questioning the Government’s ability to police the new entrepreneurs’ relief scheme according to reports. The entrepreneurs’ relief rate, announced by the Chancellor in January as a concession to small businesses, will offer individuals a 10% Capital Gains Tax (CGT) rate on the first £1 million of gains they make over a lifetime. Some MPs are unsure as to how the Government will ensure the limit is not exceeded, especially when HM Revenue & Customs (HMRC) can only look at the last six years of a taxpayer’s records.

Taxman’s swingeing new powers -

Company owners are being warned that they - and their families - could find themselves subject to “police state”- style tax investigations. The Government recently signalled its intention to increase the number and intensity of random tax investigations. Currently, some 7500 fresh probes are started every week - and the figure is rising. HM Revenue and Customs (HMRC) has introduced a new training programme for on-site investigations, which covers all types of taxation, including PAYE, income tax, national insurance, corporation tax, capital gains tax and VAT. An investigation may start with a PAYE compliance visit. However, the person carrying out the review will also be trained to consider all other taxes during the one visit and report back to the appropriate colleague with their findings. Domestic life can be involved as tax inspectors have the power to quiz family members on topics such as holidays, weekly shopping and hairdressing bills.

Introduction of income-shifting legislation pushed back -

The introduction of income shifting legislation is to be delayed another year so that fair and transparent legislation can be devised. The announcement, in a press release by HM Treasury, said the Government intends to introduce the legislation through the Finance Bill and is not expected to come into force until April 2009.

The news has been welcomed by family businesses, many of which have rallied against the introduction of such legislation. The legislation is intended to prevent business owners splitting income with another person, usually a spouse, in order to take advantage of the tax allowance of the lower earner.

East Midlands development initiative -

The East Midlands Development Agency (emda) officially launched the region’s new European Regional Development Fund (ERDF) Competitiveness Programme for the period 2007-13. Aimed at increasing productivity through innovation, improving resource efficiency in businesses and boosting sustainable economic and enterprise activity in disadvantaged communities, the Programme is set to target a range of groups and organisations.

These include small and medium-sized enterprises (SMEs), local authorities, universities, business support intermediaries, entrepreneurs and community organisations. The region’s ERDF Programme will be worth some £190 million over the next six years.

Apathy gives taxman billions -

Britons will gift the taxman more than £9 billion this year because they have failed to plan their tax affairs properly to take full advantage of available allowances. According to the latest TaxAction report, published by Ubiased.co.uk, the figure has increased by £1.4 billion to £9.3 billion in the last year. The increase will see the average taxpayer giving the taxman an extra £290 each more than they have to. The Unbiased report says that £264 million could be saved on capital gains tax if individuals use their allowance efficiently. For those who complete self-assessment tax returns, Unbiased claims that £479 million could be saved if the returns are filed before the 31 January deadline. It’s not too soon to plan ahead.