House price rise disguises regional differences

Land Registry figures show house prices rose by 2.5% in London in March alone, whereas Middlesbrough saw 5.1% fall

House prices in England and Wales increased by 0.1% in March, according to the latest Land Registry report, but the headline figure disguised a mixed pattern of rises and falls around the regions.

London continued to record the strongest growth, with prices rising by 2.5% in March alone. The annual rate of price growth in the capital hit 9.6% and the average price reached £374,568. In contrast, prices in Middlesbrough fell by 5.1% in March and were down 16.5% year-on-year to an average of £69,049.

Across England and Wales prices were up by 0.9% on March 2012, but in Yorkshire, the east Midlands and the north-east and north-west of England prices were lower than in March 2012. The biggest faller is the north-east where values have dropped by 5.5% to an average of £97,033.

In Kensington and Chelsea the average property price is now £1.1m – 12.2% higher than in March 2012

The Land Registry's data showed strong sales of homes worth £1m or more in January, with the number increasing by 28% on the same month of the previous year at 610. The number of £2m-plus properties changing hands was up 52% at 140; of these 113 were in London. In Kensington & Chelsea, the UK's most expensive neighbourhood, the average property price is now £1.1m – 12.2% higher than in March 2012.

Figures for property purchases registered in March underline the huge differences of prices being paid around the regions, with the 47,600 registrations ranging from £14,000 to £12.5m.

In recent years the London property market has been buoyed by overseas investors seeking a safe haven for their money. The recent weakness of the pound and events in other countries have bolstered demand even further, and only recently the UK's most expensive home went on sale at a reported £250m.

Giles Hannah, managing director of estate agency VanHan, said cash was continuing to come into the capital from domestic and overseas buyers.

"International buyers, particularly from Asia, are fuelling demand for best-in-class properties and are snapping them up at 10%-14% discounts as a result of the weakness of sterling compared with their own currencies," he said.

"UK-based buyers are also highly active and are seeing investment in London property as an alternative to a pension, and a way of maintaining and growing their wealth."

He added: "We have also witnessed a rise in French high net worth families relocating to London owing to the increased taxes in France, creating a shortage of supply in the £5m-plus bracket and fuelling price rises."

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Article source : http://www.guardian.co.uk

Revealed: 'Sweetheart' tax deals each worth over £1bn

Four corporations that reached settlements worth £4.5bn between them are among those let off lightly

The scale of the government's "sweetheart" tax deals – individual secret agreements drawn up between tax officials and corporations to settle disputes – can be revealed for the first time after previously unseen documents showed that just four settlements were worth £4.5bn between them.

A leaked document sent by Dave Hartnett, the former head of tax at HM Revenue and Customs (HMRC), to David Gauke, the exchequer secretary at the Treasury, discloses the figure, which has not been released by HMRC before on the grounds of preserving "taxpayer confidentiality".

The document describes deals in excess of £1bn as "not uncommon". The size of the figure has been seized upon by MPs and tax campaigners who want HMRC to release details of how much tax was owed by each of the four unnamed companies before the deals were struck.

Margaret Hodge, the chair of the Commons public accounts committee, said: "If we got £4.5bn in, how much did we not get? That is what taxpayers will want to know, and I'll be raising this with HMRC through the committee.

"Whilst it is in the interest of the government to collect monies, these are huge sums. If there were deals involved, we need to know that the companies paid a fair amount on the profits they made from their businesses in the UK."

The revelation comes as separate documents disclosed in the Guardian show that tax officials used intrusive investigative powers designed to help them catch serious criminals to try to prove that the whistleblower who uncovered one of the first sweetheart deals, involving Goldman Sachs, had spoken to the Guardian.

The belongings, emails, internet search records and telephone calls of HMRC solicitor Osita Mba and the mobile phone records of his wife, Claudia, were examined by HMRC investigators using powers to investigate criminals, the previously undisclosed documents reveal. In 2011 Mba disclosed the existence of the Goldman Sachs deal by passing information to two parliamentary committees and the National Audit Office (NAO) under whistleblowing legislation.

The disclosures about the multibillion-pound scale of the government's deals come from a seven-page memo sent by Hartnett in December 2011 as he asked for public support from Gauke in the face of growing criticism in the media and parliament.

He wrote: "In 2006, HMRC adopted a new approach to reaching tax settlements with large business through building constructive relationships and encouraging mutual openness and transparency, increasing certainty for business and reducing the time taken to resolve issues.

"Settlements of above £1bn are now not uncommon and £4.5bn … has come from just four settlements with bespoke governance."

A 2011 NAO inquiry into the four settlements found that they were made outside the high risk corporates programme set up in 2006 to ensure proper governance of deals with corporations.

Hartnett claimed in his submission to Gauke that the programme had allowed the government to bring in an extra £9bn in revenue in total – a figure previously disclosed to parliament. MPs on two select committees have claimed that the deals are secretive and allow corporations to develop a cosy relationship with tax officials.

A document sent by Dave Hartnett, the ex-head of tax at HMRC, to the exchequer secretary at the Treasury, describes the tax deals

The £4.5bn figure is believed to include a previously reported Vodafone deal which ended when the telecoms giant paid £1.25bn.

A committee of MPs was told that the Vodafone tax bill should have been £6bn or more. That figure is disputed by Vodafone.

The £4.5bn does not include, however, the relatively small Goldman Sachs agreement when the bank was let off paying up to £20m.

The revelations will be of interest to solicitors for the anti-tax avoidance organisation UK Uncut who on Thursday are taking HMRC to the high court, claiming that the deal which let off Goldman Sachs from paying up to £20m in interest charges was unlawful.

Anna Walker, a spokesperson for UK Uncut Legal Action, which campaigns on tax issues, said: "It is not legally, politically or morally acceptable to let big business off paying the tax that they owe. David Cameron and George Osborne's government's claims that they are leading the world in clamping down on tax ring hollow as these backroom 'sweetheart' deals come to light and no real action is taken."

The high court will hear UK Uncut's claims that Goldman tried to funnel employees' bonuses through an offshore tax scheme based in the British Virgin Islands, avoiding paying national insurance contributions.

HMRC admits it made a mistake in reaching a deal with Goldman, resulting in underpayment of interest on the tax due. But it argues that it acted lawfully in doing so. The hearing is expected to last for one day.

The case was granted permission to go to a full hearing in June 2012, one day before the NAO concluded a judge-led investigation into tax settlements which found that the Goldman Sachs deal was reasonable.

However, the Guardian disclosed last month that the head of the NAO, Amyas Morse, appeared to undermine the process before it had even started by telling Hartnett that the inquiry would find "nothing of substance".

It is believed that HMRC's defence rests on the findings of the NAO report that the deal was "reasonable".

A spokesman for HMRC said that it could not comment on individual agreements, but "bespoke deals" had been found to be good value.

"The National Audit Office looked into the 'bespoke governance' settlements, finding they represented good value for the country and were properly carried out. However, since then we have significantly improved the transparency of the governance around our large business settlements," he said.

Azure is led by experienced Chartered Accountants and business advisers and specialises in providing online accountancy services to owner managed businesses.Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike for more info visit our site Azure Global and join us On Facebook 

Article source : http://www.guardian.co.uk