News Archive - May 2012
HMRC launches new helpline and improved tax services for the bereaved - 23.5.2012
HMRC is to improve the quality of its contact processes and provide extra support for those who have suffered bereavement from this month, it has confirmed.
A dedicated team of advisers will staff a telephone helpline and an address box for people who need to contact HMRC about Pay As You Earn (PAYE) and Self-Assessment matters regarding deceased taxpayers.
The single point of contact is to run alongside simplified guidance and letters to taxpayers in order to simplify the process following bereavements.
The R27 - the main form which bereaved members must use to finalise the tax affairs of anyone who has died - has also been redesigned so that it is easier to complete, following feedback from customers and tax specialists.
It allows individuals to nominate a personal representative, such as an executor or administrator, to act on their behalf. The details of surviving spouses or civil partners can also be provided on the form, enabling HMRC to take action to review their tax affairs at the earliest opportunity. Explanatory notes have also been created to help customers fill in the form.
Announcing the changes, acting director general of personal tax for HMRC, Stephen Banyard, acknowledged that bereavement was an especially difficult and stressful time for family members, particularly when settling tax matters.
"We want to settle the estates of customers who have died as easily and sensitively as possible," he said.
"HMRC has been working closely with the voluntary sector and customers to improve the experience when dealing with the department after someone has died."
"It is vital that we communicate sensitively with people who have suffered bereavement. Our helpline, as well as the other changes that we will introduce over the next two years, will help us to do that."
The improved service follows a report by the House of Commons Treasury Committee last year which, working with HMRC officials, tax professionals and tax charities, established that HMRC should improve its handling of bereavement tax issues.
The Low Incomes Tax Reform Group, that has campaigned for a change to the ways HMRC deals with bereaved individuals, welcomed the 'positive steps'
UK inflation falls to two year low - 22.5.2012
Inflation fell to its lowest level since February 2010 in April, the latest figures from the Office for National Statistics (ONS) show.
The drop in the Consumer Prices Index (CPI) to three per cent, down from 3.5 per cent in March, came as a result of a fall in air and sea transport, clothing and alcohol, as well as the timing of the Easter holiday.
These drivers were partially offset by an increase in prices from restaurants, hotels and the cost of renting.
The fall in CPI was mirrored by the Retail Prices Index (RPI) - a broader measure often used for setting pay - which fell to 3.5 per cent from 3.6 per cent in March.
Despite falling from its 5.2 per cent peak in September last year, inflation remains well above the Bank of England's two per cent target where it said it will remain 'until the middle of next year.'
It is the first time within this Parliament that the Bank of England will not have to explain to the Chancellor George Osborne why the two per cent target has not been met. The Bank is required to write an open letter to the Government if the CPI rate remains above three per cent or below one per cent for three consecutive months.
Preliminary ONS figures released last month indicated that the UK economy shrank for two consecutive quarters - a technical recession - as a result of higher than expected energy prices and ongoing tough credit conditions from the Euro. The Bank of England said the economy would continue to 'face strong headwinds' from these factors.
Corporate insolvencies on the rise while personal insolvencies fall - 9.5.2012
The number of company insolvencies increased in the first quarter of 2012, although personal insolvencies were down compared to last year, figures from the Insolvency Service show.
There were a total of 4,303 liquidations in the first three months of 2012, an increase of 0.2 per cent on the previous quarter and an increase of 4.3 per cent on the same period a year ago. This comprised of 1,238 compulsory liquidations and 3,065 creditors' voluntary liquidations.
The number of personal insolvencies however, fell in the three months to March to 28,723 insolvencies, down by one per cent from the previous quarter.
This was made up of 9,132 bankruptcies, 7,897 Debt Relief Orders (DROs) and 11,694 Individual Voluntary Arrangements (IVAs).
The Insolvency Service acknowledged that recent changes in legislation may have impacted the overall numbers of those applying for DROs. Since April 2011, individuals who have accumulated money in a pension scheme are now eligible to
apply for debt relief, likely to affect the numbers of DROs and expected to have some impact on the numbers of bankruptcy orders.
Speaking to the BBC, Charles Turner, vice president of the Insolvency Practitioners Association predicted that the number of insolvencies could continue to rise this year.
"More sole traders and partnership businesses [are] seeking advice on debt issues as they struggle to cope with the recession," he said.
"There remains real concern about the prospect of a new wave of personal insolvency casualties with many consumers facing further challenges to their household budgets, not least from rising mortgage costs."
Four in five SMEs affected by postal price hike - 1.5.2012
Four in five small businesses in the UK believe the change in postal rates - which came into effect on 30 April 2012 - will affect their business and the ways in which they communicate with customers.
Questioning 1,000 small and medium enterprises (SMEs), the survey conducted by Pitney Bowes found that 81 per cent of businesses felt that increased postal rates would have a negative impact on their business; with seven per cent of those concerned it will put their business under threat.
The research follows Royal Mail's announcement earlier in the month that stamp prices were to rise by 30 per cent for a first class stamp, and by 39 per cent for second a second class stamp. Nearly half of those surveyed said the price of first class stamps will result in them sending less by post, and alter the ways in which they communicate - such as using email to contact customers.
The number of letters and parcels being sent second class through Royal Mail is predicted to increase because of the price changes, with a quarter of businesses surveyed saying they would use second class post more frequently. 15 per cent also said they were considering moving to a franking machine to avoid the price hike.
Phil Hutchison, marketing director of Pitney Bowes, said the new prices were inevitably going to have an effect on Britain's SMEs, but urged them to still consider the advantage of written communication.
Successful customer communications depend on a delicate balance of message, medium and timing. Although digital communications undoubtedly have their place, traditional print campaigns are still critical for most businesses and are
likely to remain so for many years to come.
As of 30 April, the price of second class stamps increased from 36p to 50p, and first class stamps increased from 46p to 60p.
The increase in price was made after regulator Ofcom granted Royal Mail greater freedom to set its own prices - with Ofcom saying Royal Mail was at 'severe risk' as consumers and businesses switch to other electronic means of communication.
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