Change the way HMRC do things
I am grateful to Richard Mannion, a director of Accountants and Financial Business Advisors Smith & Williamson, for bringing up the subject of recent HMRC error this with Ian Cowie of the Telegraph in the article: “New tax errors could spoil Christmas for thousands”.
The bottom line for the bungling is the appalling way HMRC is run, wasting many tens of millions of pounds of the Public Purse, which needless to say the UK doesn’t have. There is no excuse. The truth of course is that many Civil Service departments are extremely inefficient. A small hand-picked team of professional independent business consultants would probably sort Whitehall out within 6 months, half operating costs, increase productivity 10 times and transform the relationship between Government, the business community and the tax paying consumer.
If there is to be ANY benefit whatsoever of change of seats in House of Parliament which resulted in a coalition of 'soothsayers' then ADDRESSING THE SCANDULOUS INEFFICIENCIES OF HMRC WOULD BE A GOOD ONE TO FOCUS ON AS AN URGENT PRIORITY. Heavy handed tactics from an arrogant inefficient bureaucratic dinosaur is surely a government style e do not need in 21st Century Britain.
So what is the underlying problem? We are. Complicity and conformity. We accept and unacceptable, and secretly believe that nothing can be done nor any changes succeed.
Our choices:
Believe and succeed.
Ignore and remain asleep
UK Personal Insolvency indicative of health of UK Economy
140 IVAs per day. Second quarter of 2010, UK daily statistics (excluding Scotland) includes 140 new IVAs (Individual Voluntary Arrangements).
Statistics originally come from an article from Insolvency News website. I found the report on a Finance blog, together with a comment reportedly by PricewaterhouseCoopers suggesting these statistics "indicate that individuals facing financial pressures are taking affirmative action to address their difficulties". I would imagine that it is the rise of private companies specialising in IVAs that is driving growth in this niche sector of Insolvency.
Consumers who chose IVAs as the solution to their financial pressures, and personal or business debt are considerably better off than if they had decided to carry on and ignore the consequences and the eventual bankruptcy.
A typical IVA spans five years, a time shorter than it would take IVA consumers to pay off their original debts.
Many consumers are in fact self employed sole traders or directors of small and medium sized enterprises who have been trying to support their business despite poor performance. The line therefore between personal and business financial difficulties is often extremely blurred and fuzzy. Business failures are sometimes more expressed in their personal bad financial position as a result of their bad loans and duress payments to support their failing businesses.
Much of this trouble could be averted by running their business better obviously. Long before seeking protection via the IVA scheme, sole traders and business owners should seek professional advice and assistance from a business consultant to see how they could transform their business or exit it without a financial penalty. A professional chartered accountant, and sourced from a website like Accountant Now might also be helpful.
Normally, an IVA represents a financial structure of 60 monthly payments (and potentially equity release, if the consumer owns a property such as their offices or home). On the grounds that they are able to follow the schedule their debt is expunged i.e. written off. The IVA will remain on their credit report for 12 months afterwards since credit reports last for six years.
For any consumer facing the bleak situation of having to pay more than they can afford going forwards, the prospect of committing to 60 monthly payments is more attractive than their other alternatives.
IVAs however are not always the best solution in terms of insolvency. Consumers with serious debt problems in the UK end up choosing bankruptcy or a Debt Relief Order (DRO). Both these types of of insolvency release the individual from their obligation to repay their debts.
Since the variables of personal financial positions are many, one size does not fit all, and different financial and debt problems require a variety of different solutions. Some consumers may be able to avoid entering into a formal insolvency procedure at all.
Early warnings should be heeded, and it is highly advisable to at least discuss one’s financial and debt predicament as early as possible because the options will be more, and the solutions easier to deliver.
It is important to talk it over with a professional, such as a debt adviser or business consultant before committing yourself to any course of action. The Citizens Advice Bureau is an excellent resource for consumers in the first instance.
Trial Date Set For One Of The Worlds Largest Cases Of Tax Fraud
A date has been set for one of the world’s biggest tax fraud trials.
Seven former managers and executives of broadband operators Sparkle and Fastweb are amongst the 36 suspects due in court on the 2nd November.
The charges relate to an alleged creation of a paper company and the falsification of £1.64bn worth of invoices that were produced to evade taxes.
Also included in the proceedings is the founder of the company who has personally been charged with tax fraud and also money laundering.
Italian Police has seized more than 300 million euro’s from Sparkle and also 38 million euro’s from Fastweb.
If found guilty the defendants could be subject to jail time, business disbarring and heavy fines.
19% Drop In Corporate Insolvencies
Statistics have been released that show corporate insolvency has shown a 19.1% decline in Q2 of 2010; this is compared to the same period one year ago.
Despite this there has been a 0.5% increase in companies facing liquidation, but compulsory liquidations have dropped almost 10%.
The introduction and mass advertisement of CVA’s (Company Voluntary Agreements) which allows companies to continue operating. The CVA is very similar to the IVA (Involuntary Credit Agreement) which you may have seen banded around in advertisements. It allows the insolvent/s to pay off debt in a lump sum that is distributed amongst creditors, more importantly a portion of the debt can be removed as long as 75% of creditors agree. The amount wiped is usually determined by how much the credited can realistically afford.
This theory has been proven with the recent statistics which show an increase in the amount of agreed CVA’s.
Despite this announcement companies may still not be safe as experts reckon that when banks find themselves back on the right footing they will readily remove funding from business they feel are not economically viable.
Due to this concern with the banks experts expect the number of insolvencies and CVA’s to rise in the final two quarters of 2010.
Other experts also suggest that the growth of competitively priced consultancy experts will help companies to seek help before it is too late.
Parliament To Be Lobbied Over Legal Rights For Accountant Clients.
As reported on in a previous blog entry, the ICAEW is currently embroiled in a legal dispute regarding client privacy laws.
Chartered Accountants believe that any advice given to clients be covered by the same legal privileges as advice given on the same subject by legal advisors.
The case which has been ongoing for some time now has still yet to a reach a conclusion either way but ICAEW are determined to make headway in gaining rights for their members.
Ian Young, ICAEW tax faculty technical manager said:
“LPP (Legal Professional Privilege) is a common law right determined by the courts…and is a logical place to mount the arguments. But if the judgment is that there's no difference to be drawn between what accountants do and what lawyers do, and if LPP is a fundamental human right but some are denied it, then that's a travesty of the law and a strong argument for the government to feel minded to intervene if the courts can't address that balance."
The next step for the organisation should the court fail to make a decision would be to lobby Parliament and the new Government to try and get them to add to the current regulations.
AccountantNow can find the help you need with your accounting just fill in an online request and they will search for experts nationwide.
Renault Alternator
An alternator is a device which converts mechanical energy in electrical energy and are currently used in vehicles to charge the battery and power the electrical systems when the engine is running.
The video below (courtesy of davidsfarm) gives a detailed description of how an alternator works.
Currently alternators can be affected by cooling fans and so only usually operate at between 50-60% efficiency. Due to this Renault have invested money into a new system which allows the alternator to be operated manually, allowing higher productivity.
A big barrier that electric car manufacturers have had to get over is how they will substitute the alternator and starter motor, so far it seems that they will employ a combined motor/generator that will perform both functions.
Replacing an alternator can be an expensive process, the best option may be to look at parts finder sites such as CarPartBuyer who will search stockists nationwide to try and find the best price, all without you having to leave your computer screen.
RBS Hit By ‘Terror’ Fine
The Royal Bank of Scotland (RBS) has been hit with a £5.6m fine for failing to ensure that its customers and their transactions were not involved in terrorism.
The Financial Services Authority (FSA) said it was the biggest fine so far for breaching rules on financial crime.
The fine stems from 2008 when RBS did not check if customers were on sanctions lists, this lead to the FSA deeming they had created an “unacceptable risk” in facilitating financing terrorists.
Margaret Cole, FSA Director of Enforcement said:
“By failing to screen relevant customers and payments against the Treasury sanctions list, RBS group left itself open to the risk it was facilitating terrorist financing.”
Investigators at the FSA are also looking into reports that the practise wasn’t just restricted to RBS and that it may have been carried out in subsidies NatWest and Ulster Bank.
Although the bank have been fined and punished for the actions the FSA made special note that they had spotted the problems but “not acted quick enough.”
Anyone needing help with their finances is urged to call Accountant Now, who will search all experts in the area to find the one that you want, all without you having to leave the computer screen.
(Source- BBC)
Lenders Still Rationing Mortgage Deposits
It has been reported that mortgage lenders are continuing to ration the size of loans given to people mortgaging or remortgaging their homes.
Despite this the number of deals being offered to buyers has increased by 66% from 1,414 in January to 2,351 in July.
But even despite the increase 58% of available deals still require a deposit of at least 25% of the properties value, and only 8% of all deals will accept a deposit of 10%.
Michelle Slade of Moneyfacts said:
There has been no real movement in the overall number of new mortgages available on the market [in the past month], but those that are available continue to be more competitive.”
Interest rates are also dropping on approved mortgage repayment plans, the rate stood at an average 4.9% in January but six months later is around 4.5%.
Lenders although only offering loans with bigger deposits charge more interest when a bigger upfront sum is put down. For example a 2 year fixed deal with a 90% deposit will reap an interest rate of around 6% whereas the same deal with a 40% deposit stands at a 4% interest rate.
According to the Council of Mortgage Lender (CML) the average first time buyer is putting a deposit of around £35,000.
RBS have been outed as having the worst rates with a 10% deposit on a 5 year fixed term yielding an interest rate of 6.89%.
Aaron Strutt, of mortgage brokers Trinity Financial added:
“You would have to be really desperate to take this rate.”
Companies Urged To Be Aware Over Accounts
Private companies may have to provide confidential account information in the wake of the recession to prove their financial strength.
Accounts from December 2009 that are due in September may have to include monthly compiled management accounts, if companies want to keep their credit scores as they are.
Xavier Denecker of Coface credit insurers said:
"If their situation is improving in 2010 then let them provide credible management accounts and our credit appetite will increase."
For the past few months credit agencies have been requesting management accounts arguing that lending cannot happen without these as they will not be able to ascertain the standings of a company, as a result of this no lending is occurring making the knock on affect lack of growth. Which causes a serious risk to the economy.
That is also the argument being used by creditors in a bid to get businesses to share the accounts.
If you need help filling your account, have a look at accountant now who will search for the specialist you need, saving you time and money.
2 Million Counterfeit £1 Coins Returned
The Royal Mint has released figures from the last financial year showing that £2 million worth of counterfeit £1 coins were returned to them.
This figure was more than 23 times the amount of six years earlier, an estimated one in 36 of the coins circulated is thought to be counterfeit.
To try and combat this and the affect it has on small businesses the Mint will be starting a campaign to help people spot the fake coins.
In a year alone financial institutions handle over 3 billion pound coins and when the first survey into returns was conducted in 2003/2004 only 85,000 were stood out to be fake.
One way to check if coin is genuine or not is to the alignment, hold it so the queens head is upright and facing you – when you turn the coin over the pattern on the reverse should be upright. Fakes are often at an angle.
Royal Mint also have a design portfolio online that shows the current reverse of coins although this maybe an issues if the coin is older as designs change annually.
The announcement of this also coincides with the announcement that cheques will be phased out by 2018 should a more viable alternative to be available, the UK Payments Council said:
“There should be no scenario for using cheques by 2018.”
If you are a small business and could face difficulty with counterfeit currency and need advice contact Business Service Finder who will find the best priced expert for you.