News Archive - April 2012
12,000 sent incorrect tax penalty notices from HMRC - 30.4.2012
HMRC has apologised to more than ten thousand people who were wrongly sent penalty notices after it believed they had failed to file self assessment tax returns.
The 12,000 individuals are among many who have been removed from HMRC's self assessment database following a cleanse of the database and an invitation to taxpayers to contact HMRC if they felt they shouldn't be in self assessment.
The penalty notice letters warned individuals about £10 daily fines for non-filing which start on Tuesday, as well as a fixed penalty of £100. HMRC is to send letters apologising to those affected.
According to national press, a spokesperson for HMRC said: "We are very sorry and can reassure these customers that we know who they are and that this letter is incorrect - they do not owe a penalty. We are writing to all of them to apologise and to explain this error."
"We can reassure these customers that they have been removed from self assessment," they added.
The deadline for online self assessment forms was 31 January, although strike action caused this to be extended to 2 February, while the paper return deadline was in October last year.
HMRC is introducing new fine penalties this year, meaning that as well as the fixed £100 for late filing, individuals will also be fined £10 for each additional day from Tuesday 1 May, up to a maximum of £900 over three months. Returns that are six months late will be charged an additional £300 or five per cent of the tax due, whichever is the higher.
Inflation unexpectedly rises to 3.5% - 17.4.2012
Inflation in the UK rose in March to 3.5 per cent, up from 3.4 per cent the previous month, driven by higher food, clothing and recreation prices, according to the Office of National Statistics (ONS).
The figures from the Consumer Price Index (CPI) put an end to the five-month run in falling inflation since it peaked at 5.2 per cent in September 2011.
The Retail Price Index (RPI), a broader measure of inflation often used for setting pay, stands at 3.6 per cent - down from 3.7 per cent in February.
According to the ONS, one of the biggest upward pressures came from food prices, particularly fruit bread and cereals, which fell much less on the same two months a year ago. Although prices generally rise between these two months, prices this year are 4.6 per cent higher than in March 2011 when supermarkets led heavy discounts and sales. Increases in clothing, footwear, computer games and DVDs prices also caused inflation to rise.
Small respite came from lower energy prices, particularly electricity, with smaller downward pressures coming from furniture, household equipment and maintenance.
The rise in inflation may cause concern for the Bank of England's Monetary Policy Committee (MPC) whose targets hope to see inflation fall to two per by the end the year.
Talking to the BBC, Vicky Redwood, chief UK economist at Capital Economics, expected the trend to be temporary, saying: "Inflation should start to fall again before long, not least as last year's rises in energy prices continue to fall out of the annual comparison.
We also expect core price pressures to ease as the economic recovery loses momentum again.
Economists have speculated that the rise in figures will quell the MPC's decision to begin another round of quantitative easing when the current £325 billion programme is completed in May.
'Big six' energy deal to benefit households and businesses - 12.4.2012
An agreement between the UK's 'big six' energy companies, meaning they will be required to tell customers if they are overpaying and allow them to switch to a better deal , is to cut the bills of millions of consumers and businesses, according to the Government and business groups.
Deputy Prime Minister Nick Clegg said that the deal, which will cover 99 per cent of energy customers in the UK, will save households up to £100 a year when it is implemented in the autumn.
According to ministers, seven out of 10 consumers are on inefficient and costly tariffs due to nearly 120 different and complicated tariffs available on the market.
Announcing the move, Nick Clegg also alluded to the Government's Green Deal due to come into force in October this year, which will enable homes and businesses to recoup payments of energy efficient improvements through their energy bill. It is hoped the deal will reduce both carbon emissions and household and business energy bills.
Retailers, tradespeople, energy companies and investors supplying the improvements will also benefit from the deal, with the Government estimating it to support 100,000 jobs within five years.
Responding to Nick Clegg's speech Katja Hall, chief policy director of the Confederation of British Industry (CBI), said: "This pledge by energy companies is a positive step, which together with the Green Deal will make a real difference to the energy bills of consumers and businesses in difficult times.
It's increasingly important to argue the case for our green economy in helping to deliver much-needed growth. Energy efficiency and a shift towards a low carbon economy will not only bring benefits in cost savings, but also provide opportunities for growth and investment.
With the right policies in place, the Government can give investors the confidence they need to inject billions of pounds into our energy infrastructure and create thousands of jobs. The key is investor certainty and a new long-term industrial policy will be crucial to achieving this.
New tax year brings in tax and benefit changes - 5.4.2012
Significant tax and benefit changes, which come into force with the beginning of the 2012/13 tax year on 6 April, will affect millions of families around the UK, according to Government and opposition figures.
Amongst the biggest changes is the increase in the income tax personal threshold - the amount of income that can be received tax-free - which is to rise by £630 to £8,105. Other benefits, including job seeker allowance and maternity benefits are to rise by 5.2 per cent in line with inflation.
Opposition MPs and unions, however, have criticised the freezing of child benefits and changes which will see parents working a minimum of 24 hours per week - rather than the current 16 hours - in order to qualify for working tax credits.
The Trade Union Congress has said the changes to tax credits will outweigh any benefits from the personal allowance being raised, with some families loosing up to 20 times more than they will gain as a result.
TUC General Secretary Brendan Barber said: "Millions of people will be getting a small boost from the personal allowance increase this Friday, but working families are likely to have lost far more from cuts to tax credits. With unemployment at a 17-year high and full-time jobs being replaced with part-time ones, parents struggling to find 24 hours of work between them could lose
thousands of pounds.
"Complicated changes to child benefit for higher rate taxpayers will provide further financial headaches for many parents this year."
"From tax credits to cuts in vital public services, families are bearing the brunt of the government's austerity measures. This approach is self-defeating as providing greater support towards the cost of raising children helps their development and boosts the economy, as parents tend to spend nearly every penny they earn."
Other key changes include:
- The child element of child tax credits is to rise by £135 while couple and loan-parent elements of working tax credit are being frozen
- The personal allowance for 65 to 74 year olds is to rise from £9,940 to £10,500.
- The lifetime allowance for pensions will reduce from £1.8 million to £1.5 million.
Amongst the biggest changes is the increase in the income tax personal threshold - the amount of income that can be received tax-free - which is to rise by £630 to £8,105. Other benefits, including job seeker allowance and maternity benefits are to rise by 5.2 per cent in line with inflation.
Opposition MPs and unions, however, have criticised the freezing of child benefits and changes which will see parents working a minimum of 24 hours per week - rather than the current 16 hours - in order to qualify for working tax credits.
The Trade Union Congress has said the changes to tax credits will outweigh any benefits from the personal allowance being raised, with some families loosing up to 20 times more than they will gain as a result.
TUC General Secretary Brendan Barber said: "Millions of people will be getting a small boost from the personal allowance increase this Friday, but working families are likely to have lost far more from cuts to tax credits. With unemployment at a 17-year high and full-time jobs being replaced with part-time ones, parents struggling to find 24 hours of work between them could lose
thousands of pounds.
"Complicated changes to child benefit for higher rate taxpayers will provide further financial headaches for many parents this year."
"From tax credits to cuts in vital public services, families are bearing the brunt of the government's austerity measures. This approach is self-defeating as providing greater support towards the cost of raising children helps their development and boosts the economy, as parents tend to spend nearly every penny they earn."
Other key changes include:
- The child element of child tax credits is to rise by £135 while couple and loan-parent elements of working tax credit are being frozen
- The personal allowance for 65 to 74 year olds is to rise from £9,940 to £10,500.
- The lifetime allowance for pensions will reduce from £1.8 million to £1.5 million.
Stamp prices to increase by nearly 40% - 1.4.2012
The cost of first and second class stamps is to rise after the regulator Ofcom granted Royal Mail greater freedom to set its own prices.
From 30 April, a first class stamp will increase by 30 per cent from 46p to 60p, and a second class stamp will increase by 39 per cent from 36p to 50p - the biggest hike in prices since 1975.
Ofcom said that it wanted to 'safeguard' both consumer prices and Royal Mail, saying that the postal service was at 'severe risk' as consumers and businesses switch to other electronic means of communication.
Royal Mail will now make decisions on the price of stamps, although prices will be regulated by a safeguard cap meaning second class stamps will not exceed 55p in the next seven years. Small parcels and large letters up to 2kg in weight will also be capped from next year.
A Government report into the increase in prices, published in early March, had focused on the impact to vulnerable customers and small and medium enterprises (SMEs) and concluded that increases were necessary as 'market uncertainty' was placing mounting pressure on Royal Mail.
Stuart McIntosh, Ofcom's director of competition, said: "Ofcom's decisions are designed to safeguard the UK's postal service, ensuring it is sustainable, affordable and high-quality, to the end of the decade and beyond."
"The measures ensure that Royal Mail's products remain affordable for vulnerable consumers and small businesses."
However, business groups have voiced concern that the hike in stamp prices will affect SMEs, with the Forum of Private Business (FPB) saying first class charges will become unaffordable for many firms who will eventually resort to using the slower second class system.
John Walker, national chairman of the Federation of Small Businesses (FSB) said: "Rapidly raising stamp prices now will be bad for business. With small businesses and consumers being hit by other rising costs, this has come in at a time when they can ill-afford it."
BUDGET 2012
Below are downloadable files in pdf format covering the main points of the budget :
Budget 2012 - Summary | |
File Size: | 63 kb |
File Type: |
Budget 2012 - News for businesses | |
File Size: | 60 kb |
File Type: |
Budget 2012 - Expanded topics | |
File Size: | 59 kb |
File Type: |