'Big four' accountants 'use knowledge of Treasury to help rich avoid tax'

Experts offering advice on legislation they helped to create is 'ridiculous conflict of interest', says select committee chair Margaret Hodge

The so-called "big four" accountancy firms are using knowledge gained from staff seconded to the Treasury to help wealthy clients avoid paying UK taxes, a report by the influential Commons public accounts committee says.

Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers have provided the government with expert accountants to draw up tax laws. But the firms went on to advise multinationals and individuals on how to exploit loopholes around legislation they had helped to write, the public accounts committee (PAC) found.

Margaret Hodge MP has called on the Teasury to stop accepting staff from the 'big four' accountancy firms when drawing up new laws.

 Margaret Hodge, the PAC's chair, said the actions of the accountancy firms were tantamount to a scam and represented a "ridiculous conflict of interest" which must be stopped. "The large accountancy firms are in a powerful position in the tax world and have an unhealthily cosy relationship with government," she said, calling for the Treasury to stop accepting their staff to draw up new tax laws.

The report comes after David Cameron on Thursday set out plans to use Britain's chairmanship of the G8 to tackle what he described as staggering worldwide levels of tax evasion and avoidance.

The PAC claims HM Revenue and Customs had to seek outside help because it was engaged in a "battle it cannot win" in seeking to stem the losses to the exchequer from tax avoidance.

The accountancy giants employed almost 9,000 staff and earned £2bn a year from their tax work in the UK, and £25bn globally, the report claims. MPs found that Revenue and Customs had far fewer resources, particularly in the area of transfer pricing: complex transactions deployed by multinational companies in order to shift taxable profits to low tax jurisdictions. "In the area of transfer pricing alone, there are four times as many staff working for the four firms than for HMRC," the report says.

The committee highlights the way the firms seconded staff to the Treasury to advise on issues in the drafting of legislation. "Through their work in advising government on changes to legislation they have a detailed knowledge of UK tax law, and the insight to identify loopholes in new legislation quickly," it said.

One example in the report is that of KPMG, whose staff advised on the development of "controlled foreign company" and "patent box" rules, and then issued marketing brochures highlighting the role they had played. The brochure "Patent box: what's in it for you" had, it said, suggested the legislation represented a business opportunity to reduce tax and that KPMG could help clients in the "preparation of defendable expense allocation".

The committee is "very concerned by the way that the four firms appear to use their insider knowledge of legislation to sell clients advice on how to use those rules to pay less tax", the report adds.

The report was welcomed by Prem Sikka, professor of accounting at University of Essex. "They [the big four] are the epicentre of a global tax avoidance industry and the loss of tax revenues is directly responsible for the current economic crisis. The Treasury should follow the US authorities and prosecute and fine the firms. The habitual offenders should be shut down," he said.

Officials from HMRC rejected criticisms that tax officers were not making progress in tackling avoidance. "The facts show that we are not only aggressively fighting battles against tax avoidance, but we are winning them," a spokesman said.

KPMG said in a statement: "When requested to by government departments we do provide individuals on secondment. Their role is to provide tax technical input and commercial experience so that the authorities can make informed choices on tax policy. Our secondees do not write legislation or make policy decisions."

Bill Dodwell, head of tax policy at Deloitte, said: "We do not believe that there has ever been any conflict of interest but would want to help ensure that there is no perception of conflict." Kevin Nicholson, head of tax at PwC, said: "We provide technical insight to government but only when asked and are never involved in deciding tax policy which is a matter for the government."

In evidence to the committee, John Dixon, Ernst and Young's head of tax, said: "I think there are benefits in the work we do with government ... benefits to the country at large. If you look at the quality of the legislation that we now have ... it is a lot better than it was 10 years ago.

"Why is that? Because we are actively working with government, at our cost, to make sure that the legislative footprint we are working with is as clear and concise as it can possibly be."

An HMRC spokesman said: "HMRC gives careful consideration to the potential risks, as well as how to mitigate any potential conflicts of interest, before any such secondments are agreed. On balance, the carefully targeted use of secondees is beneficial for the development of tax policy and improving the effectiveness of the tax system."

Cameron, who hopes to use an EU summit in May as a stepping stone to a wider agreement at the G8, wrote to all EU leaders proposing:

• Rapid movement to a global system of information exchange to help tackle tax evasion including through the use of offshore trusts.

• Action plans by G8 countries to produce full transparency, breaking through walls of corporate secrecy and establishing central public company registries.

• Voluntary deals for multinational firms to make clear the tax they pay in every country they operate in.

• Implementation of the EU accounting directive so developing countries can access information on payments to governments made from the oil, gas and mining industries.

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

NatWest hit by system failure less than a year after last outage

Bank says that online and telephone banking, cash withdrawals and payments have been affected for majority of UK customers
Countless Natwest clients were remaining struggling to distance them self cash or perhaps help to make dealings about Thursday, less than a year after That difficulties remaining several struggling to transfer funds or even settle payments for several days.

The bank asserted on the internet and telephone financial, money distributions as well as payments have been afflicted. It stated it recognized that almost all UK consumers have been impacted. But no reason at all was handed for the problems.

NatWest furthermore established the situation about it's customer providers Facebook accounts: "We are aware of the difficulties our clients are possessing and apologise, we will provide more information the moment we've this.Inch
Nevertheless the apology was satisfied along with disapproval by hundreds of its clients, with a lot of upset that the financial institution acquired endured one more method disappointment.Joe Holmes, coming from Lancashire, tweeted: "@NatWest_Help it is possible to issue once again?!!! Abruptly cannot use my personal money card and every one of your own online solutions and programs are certainly not working.

"@NatWest_Help less than a 12 months following the previous fiasco -- this seriously isn't adequate."

Simon Brittain, another disappointed client, tweeted: "#natwest greeting card dropped within Indian native bistro, truly awkward #shambles #notagain.

"#natwest @natwest time to change? Two times in 2 years seems careless.

NatWest is actually owned by the Regal Lender regarding Scotland team. Final June"technical issues" led to setbacks to be able to amounts getting updated and also countless consumers having issues making use of their credit cards for three days.

RBS, NatWest as well as Ulster Bank needed to extend beginning hours inside their branches to aid clients who had previously been unable to pay bills, move money or whoever incomes was not paid.Later more than Seven hundred,500 customers have been impacted by a "human error" in which led to some company accounts becoming debited twice.

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

Aon defers bonus payments to avoid 50% income tax

The London-based insurance broker Aon is helping 250 of its remarkably paid personnel prevent 50% tax by just deferring incentive payments prior to the newtax 12 months.
Some of the best broker agents, such as Willis, is likewise thinking of if you should allow his or her workers for you to put rear repayment schedules until eventually right after Six to eight Your planting season when the leading demand of revenue fees declines as a way to 45%.
Merely days and nights when the investment bank Goldman Sachs ended up being required to back unattended plans to delay sign up bonus deals, it can be surfaced that Aon has set elements setup to obstruct payments for its employees in order that they spend taxation using 45%. The actual shift permits an executive thinking about any £200,000 payout to save £10,500 inside duty.

Goldman's U-turn appeared immediately after decision from the Standard bank connected with Englandgovernor, Friend Mervyn Grasp, together with force through people in politics. That they told the Treasury pick cell: "I believe that it is just a little demoralizing that folks who are generating much appear to contemplate it happens to be additional fascinating as a way to sort of adjust your right time to of computer to find the plus side to a lower taxes price that they will find a way to benefit coming from in the end with a fairly great extent.In .

Aon and other firms risk damaging their reputations by deferring bonus payments to staff, says the Bank of England governor, Sir Mervyn King

Goldman following reported it turned out will no longer contemplating if it need to delay payments on perks originating from Last year, 2010 and The new year, that happen to be on account of grow to be offered to be able to personnel in the arriving several weeks, before the prime price tag decrease.
Quite a few Place organizations making use of workers that will spend on your leading value connected with fees can contemplate should you wait obligations to the new duty yr however specialists feel many produced our mind upwards towards this kind of move carrying out a remove in the deficiency of levy paid for through java line Favourite coffee shop in great britain.

Aon is among many important insurance providers to be able to media ahead of time as well as deferring incentive responsibilities even though Willis said it was still considering whether to do furthermore. "Willis will need this disorder seriously and we're critiquing that,Inch pointed out any kind of representative to your insurer, which employs around 3,000 staff in britain.
The actual Aon sign up signup bonuses overlap using your current Buy budgetary Yr along with ended up due to get paid inside Generate. They will end up being taken care of within '04 following the start of the brand-new impose calendar year.
A whole new representative spelled out: "Qualifying Uk employees acquired either deferring settlement with the The coming year register signup bonuses through Generate that you should The actual planting season 2013. Roughly Two hundred and fifty workers, 4% from the United kingdom worker foundation, decided on this strategy.Throughout .

Aon, which experts claim results in your current Person utd little league class tee shirts, possesses many firms inside the united kingdom including insurance company Benfield in addition to Human resources specialists Hewitt. This particular moved it is hq through Chicago, in order to Greater london recently in order that it may be more detailed your Lloyd's of London insurance plan market place.
The particular shift relating to Aon's Hq brought on predictions of countless lbs of more income for your exchequer so the latest shift may possibly show to be a great being made fun of to the chancellor, Henry Osborne, whom got turned down for you to widely criticise Goldman around levy.
Just about any treasury reverend, Sajid Javid, though, talked as a way to very best representatives for the traditional bank right after King's feedback in order to MPs.
The lending company concerning Britain governor knowledgeable the specific panel: "It would be rather ungainly and rather lacking in care and attention for you to how others may possibly react … eventually, banking companies, like all huge businesses, depend on excellent will surely from your all modern society, they cannot merely are available on their own.In .
Jesse Cameron skilled criticised the specific income taxes extramarital affairs from the witty Jimmy Carr widely throughout June though the govt was slower as a way to lambast corporations with this group strategy.
The specific coalition characteristics mindful before calendar year that is would certainly reduce the 50% leading value regarding tax levy unplaned by means of Perform in which got into influence this coming year.

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

HMV calls in administrators with 4,500 high street jobs at risk

Ninety-one-year-old music chain falls victim to online shopping trend after failing to agree on new debt terms with banks

HMV has confirmed it will call in administrators from Deloitte on Tuesday, as the 250-strong chain became the latest casualty of the shift to online shopping, putting 4,500 jobs at risk.

Stores were expected to open on Tuesday but the firm said it would not be accepting gift vouchers or issuing any more.

HMV stores were expected to open on Tuesday and analysts expect a buyer for at least part of the group

HMV held discussions with its banks over the weekend but failed to agree on new terms for its debt.

It said in a statement issued on Monday night: "The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect."

Nick Edwards, Neville Kahn and Rob Harding of Deloitte will be appointed as administrators. The company said: "The directors understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business."

Analysts expect a buyer for at least part of the group. As the reaction to HMV's demise has shown, the brand, famous for its Nipper the dog trademark, still holds a cachet for many people. HMV had around 35% of the, albeit dwindling, CD market in 2012 and it is thought that around half of its 240 stores could be profitable once the company gets rid of its debt.

Rumours circled on Monday night that the restructuring company Hilco could be interested in buying the group out of administration. Hilco bought HMV Canada from the UK parent in 2011 and has overseen a better-than-expected Christmas at the north American arm, which rang up sales of $65.4m (£40.5m) over the festive period, beating targets.

It was thought that the US vulture fund Apollo Global Management had been considering a bid but is no longer interested in buying the chain. Apollo bought 6% of the company's bank debt two weeks ago.

Neil Saunders, the managing director of the research house Conlumino, said: "The brand certainly has some value, however, while someone could arguably turn a profit in running some of the stores for a period of time they would still be betting against the future. By our own figures, we forecast that by the end of 2015 some 90.4% of music and film sales will be online. The bottom line is that there is no real future for physical retail in the music sector."

The news prompted many to mourn the demise of the 91-year-old chain. Chuka Umunna MP, Labour's shadow business secretary, said: "HMV is a national institution that has been a feature of our high streets for over 90 years so this news is deeply worrying. For the sake of HMV's employees, we hope a way can be found to keep the business going. The demise of HMV – a national institution – would be a sad loss for British retail."

Twitter also saw an outpouring of emotion from fans of the store, with comments such as: "HMV closing is the worst thing that's ever happened to me."

But analysts were philosophical about the chain's collapse. Saunders said: "This outcome was always inevitable. While many failures of recent times have been, at least in part, driven by the economy, HMV's reported demise is a structural failure. In the digital era where 73.4% of music and film are downloaded or bought online, HMV's business model has simply become increasingly irrelevant and unsustainable.

"HMV did not react early enough to the digital trend; it did not give shoppers a reason to keep buying from it. Admittedly, the company has tried to innovate through selling more electricals and gadgets but, unfortunately, these initiatives were never going to be enough to counteract the terminal decline in its core business."

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

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

EU membership is crucial to Britain's growing car industry

The UK's car industry is a bright spot in the economic gloom – let's not jeopardise it by pulling out of Europe

We may have just overtaken Brazil to become the world's sixth largest economy, but the overall economic outlook for the UK remains relatively bleak. Some economists foresee a full-blown triple-dip recession, and with consumer spending and domestic investment remaining sluggishand more public spending cuts just round the corner, even minimal economic growth will be highly dependent on an increase in British exports.

Production of the electric Nissan Leaf will start in the UK next year

Despite the doom and gloom, one sector continues to provide a small glimmer of hope: the British car industry. Rapid growth in output and productivity is bucking the wider trend of relative economic decline and restoring the UK's position as a global manufacturing hub. This resurgence has been driven by a range of factors, but especially important has been an increase in foreign investment, international trade and innovation. In each of these areas, Britain's membership of the EU remains crucial.

Over the past two years, the British automotive industry received nearly £6bn of foreign investment. Just as with the Japanese companies hailed with rescuing the British car industry in the 1980s, this investment has been primarily motivated by the UK's position as a launchpad into the highly regulated EU market. And while domestic demand has grown in the past year, 80% of all vehicles produced in the UK are still sold overseas, over half of them in the EU.

If the UK were to leave the single market British-produced vehicles would face import tariffs from 10% to 22%, as well as numerous regulatory barriers. Major foreign investors such as Nissan, Ford and BMW would rapidly look elsewhere, probably to more secure EU members such as Poland or the Czech Republic. Even if the British government was able to renegotiate a unilateral free trade deal with the EU, it would be unlikely to enjoy unrestricted access to the single market and the accompanying uncertainty would make any would-be investors think twice.

Admittedly, the EU market has seen a dramatic decline since the eurozone crisis. This makes it essential to expand exports into emerging markets through free trade deals. The EU-South Korea trade agreement, signed last year, has helped bring about an 8% increase in vehicle exports from the UK. The recent trade agreement with Singapore should also give a major boost to British car exports.

Yet this will be small change compared to the breathtaking potential of EU free trade negotiations with Japan and the US, due to be launched in the coming months. While it could negatively impact the EU car industry as a whole, a deal with Japan could help boost investment in the UK and decrease the input costs of British-manufactured Japanese cars. The US on the other hand is the UK's largest export market, and currently far more British vehicles are exported to the US than vice versa. However, without the economic weight of the EU, it is unlikely the UK would be able to gain any favourable concessions in the politically sensitive American automotive sector.

Finally, EU carbon emission targets and specific incentives to produce low-emission cars have helped spur innovation in the UK automotive sector. The European Commission has also invested billions of euros in research and development funding, encouraging cross-border research projects and ensuring that Europe remains a world leader in developingsmarter and greener technologies.

The importance of this can be seen in the UK, where soaring petrol prices have encouraged consumers to switch to more fuel-efficient cars. Meanwhile sales of electric cars have more than doubled and are expected to increase further as new models become available – notably the Nissan Euro Leaf, which will start production in Sunderland next year. Outside of the EU, the UK would soon lose its competitive edge in the global transition towards more innovative, low-carbon vehicles.

Britain's car industry is a vital part of its economy, supporting 730,000 jobs and accounting for 11% of manufactured exports. It also plays a crucial role in offsetting the UK's huge trade deficit; this year Britain sold more cars abroad than it imported, for the first time since 1976. And thanks to the presence of factories and supply chains throughout all UK regions, it's an industry that helps to balance the growing north-south divide.

As a group of senior business leaders recently warned Cameron in the build-up to his much anticipated Europe speech, casting doubts over Britain's EU membership at this time risks creating a climate of "damaging uncertainty". Such uncertainty would be especially harmful for Britain's thriving car industry, and thus for the British economy as a whole.

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

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

Small business owners “nervous” about looming fiscal cliff

Eric Blinderman, who had to shut down his two upscale New York restaurants for a week in the aftermath of Hurricane Sandy, said the approaching fiscal cliff could mean a “double whammy” for his business heading into the busy holiday season.

With a package of $500 billion in tax increases and spending cuts set to come into effect on January 1 if President Obama and Congress fail to agree on an extension or reach an alternate deal, small business owners like Blinderman will be hit with additional costs that could seriously impact their bottom line and ability to grow.

“That uncertainty is what leaves me so nervous,” said Blinderman, who operates two restaurants, both named Mas, in Manhattan’s affluent West Village that employ about 100 people.

Blinderman relied on a pair of Small Business Administration (SBA) loans to open his restaurants and wants to launch a third location, but said some of the projected cuts to the SBA’s budget may derail that.

“If we don’t sidestep the fiscal cliff then I won’t be able to expand,” he said, referring to the $65 billion in federal spending cuts that will be automatically triggered as a result of the Budget Control Act – a last-minute deficit-reduction deal reached by Obama and the Republican-led Congress in August 2011.

“All of these SBA lending programs and related issues will be impacted negatively,” said Blinderman, adding: “if this had occurred in 2010 or 2004 I wouldn’t be a small business owner and neither of my restaurants would exist.”

Blinderman’s concerns are supported by the findings from a new national poll released this week by the Small Business Majority, a Washington, D.C.-based small business advocacy group. The telephone poll of 500 small business owners, conducted over a two-week period from September 27 to October 12, showed more than 60 percent of respondents are anxious about the potential impact of spending cuts on the SBA, military, infrastructure and government contractors.

“The vast majority of small business owners are familiar with the basic situation,” said SBM founder and CEO John Arrensmeyer. “The concern is how much of this is going to affect small businesses and job creation.”

Small business owners are most worried about the impact of tax increases on their employees and customers. A 2-percent payroll tax cut Obama negotiated with Congress in 2010 when the Bush-era tax cuts were extended is due to expire, ending what amounts to a $1,000 income boost to many middle class taxpayers.

Also beginning in 2013, 28 million Americans could be subjected to the alternative minimum tax (AMT), a levy initially created in 1969 as a “millionaire’s tax” but now would apply to people with incomes as low as $30,000.

The SMB poll showed 80 percent of small business owners are concerned about a potential increase in the number of households facing the AMT, which Arrensmeyer said would entail a loss of as much as $2,800 per household.

The survey also revealed 75 percent of respondents favored the elimination of tax loopholes that favor large corporations and nearly 60 percent supported raising capital gains tax to 20 percent for the wealthiest 2 percent, which includes people earning above $250,000 a year.

Arrensmeyer said that applied to less than 3 percent of the small business owners who participated in the poll, of which 47 percent identified themselves as Republicans, versus 35 percent Democrat, 8 percent independent and 10 percent who chose “other” or didn’t respond.

“My customers are squarely in the middle class,” said Mike Brey, owner of Fairfax, Virginia-based toy store chain Hobby Works. “We got crunched pretty hard during the recession. We don’t want to be looking at another ‘pothole’ here as we recover from what we just went through.”

Brey, who operates five stores in Virginia and Maryland that bring in about $5 million in annual revenues, is in the process of adding two more locations. He said political dithering over the deficit could derail his expansion plans as the amount of tax exemptions he can employ could be significantly reduced come January.

“It’s extraordinarily difficult when a major portion of your tax planning is up in the air,” confessed Brey, who added it impacts his ability to get bank loans. “If you’re expected to lose a significant portion of your ability to capitalize expenses in the first year, that definitely affects your projections and your planning for how you’re going to move forward.”

Most small business owners just want their political leaders to come to some sort of resolution. The SMB poll found 53 percent want Congress and the president to make job growth their top priority, as opposed to 42 percent who want them to focus on a plan to reduce the deficit.

Larry Lang, chief executive for Quorum, a Silicon Valley-based technology company that develops cloud-based software solutions for businesses, doesn’t anticipate there will be a resolution before the end-of-the-year deadline.

“Sadly politicians, like undisciplined school children, tend to leave their homework to the 11th hour,” said Lang, who nevertheless plans to grow Quorum’s 30-person staff by as much as “50 percent” in the next year.

“Sticking to our knitting, life goes on,” he added. “Small and medium-sized businesses need to do what they need to do.”

Article source :http://uk.reuters.com

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