Let’s start with “Land Reform”.  The First Minister has set up a group of experts to look at this issue.  The First Minister wants the group “to deliver radical change” for both rural and urban areas.  It will be chaired by former Moderator of the General Assembly of the Church of Scotland, Dr Alison Elliot.  More information on the review can be found here.  One factor that is noticeable by its absence is taxation.  This should also be a review of how we tax our land and property.  If not included this is an opportunity missed.

Who is to blame for the state of the economy?  You would have though bankers might be high up on any list.  However, it seems there is another favoured suspect, tradesmen.  David Gauke, Exchequer Secretary at the UK Treasury, called people who pay tradesmen in cash “morally wrong”.  He has also claimed that the UK Government has missed out on about £2bn on taxes on these “off the books” transactions.

In response the regularly excellent Ian Bell wrote an article titled “Plumbers dodging VAT aren’t to blame for economic mess”.  His article in the Herald article can be found here.  This is one of the best articles I have read recently.

Gauke was also not helped when it transpired that Boris Johnson, David Cameron and Nick Clegg have engaged in the practice of paying tradesmen cash.  Gauke’s full speech can be found here.

The tradesmen issue aside, there were many good things in Gauke’s speech.  This includes a new UK Treasury consultation paper on giving HMRC new powers to force tax firms to disclose clients who are using tax avoidance schemes.  A report on this from the BBC news website can be found here.  More information on this consultation can be found here.  It is though still surprising that the UK Treasury has taken so long to even consider measures such as this.

It is always worth putting figures in context.  A new study for the lobbying group Tax Justice Network claims that wealthy individuals worldwide are holding at least $21 trillion in bank accounts in low-tax jurisdictions.  This dwarfs the £2bn figure mentioned above.  A report on this from the STEP Journal can be found here.

Now to the Scottish Government’s consultation on its proposed Land and Buildings Transaction Tax.  The consultation can be found here.  The Land and Buildings Transaction Tax will replace the current UK Stamp Duty Land Tax from April 2015.  This is important as it is effectively the beginning of a Scottish tax system.  The consultation is also of a standard that we will now expect.   Previous papers on corporation tax and excise duty, although not consultations, were simply not good enough.  Lessons clearly have been learned.  The consultation ends on 30 August 2012.

Now to the North Sea.  George Osborne has pledged £500m in tax breaks for companies developing the Cygnus gas field in the North Sea.  In addition two Chinese firms announced major acquisitions worth over £10bn in North Sea oil firms.  More on these stories can be found on BBC news website here and the Press & Journal here.  It seems that there is a great deal of life left in the North Sea and not just in Scottish waters.

One of the most important art objects ever donated to Scotland’s national collection in lieu of inheritance tax has gone on display. The Hamilton-Rothschild Tazza, a Byzantine sardonyx bowl mounted on a 16th-century gold stand, came from the estate of Edmund de Rothschild, who died in 2009, under the “Acceptance in Lieu scheme”.  A report on this from the STV website can be found here.

Now to an issue I have blogged about before.  An investigation for the Sunday Herald has shown that due to the charitable status of fee-paying schools in Scotland, while local authority schools have to pay full non-domestic rates, because many fee-paying schools are charities they receive an 80 per cent discount on their rates.  The investigation suggests the discount has saved private schools in the six local authority areas investigated £10m over three years. An article on this issue from the Sunday Herald article can be found here.

This issue shows how complicated devolution can be.  Non-domestic rates and charitable status are devolved matters.  Tax relief for charities is a reserved matter even under the provisions of the 2012 Scotland Act. 

Interestingly in the same week Stephen Twigg, Shadow UK Education Secretary, has said that Labour may remove the charitable status of some private schools.  Twigg warned that a UK Labour Government could enact legislation so that private schools not serving the community would lose their charitable status.

The UK Government has finally confirmed that fuel duty, air passenger duty and road tax are not environmental taxes.  This means that they are “revenue raisers” pure and simple.  The UK Treasury now defines an environmental tax as a charge which is explicitly linked to Westminster’s environmental aims, aimed at promoting behaviour change and is structured so that people pay more based on the potential damage caused to the environment.  An article on this from Holyrood can be found here.

I think I will finish with China and its attempt to attract more foreign investment.  China has slashed from 10% to 5% the withholding taxes it levies on profits repatriated by foreign companies, and on dividends paid to foreign shareholders of Chinese-quoted shares. The concessions apply only to companies based in double tax treaty partner countries, excluding the US.  A FT China article on this can be found here.

Have a good weekend.

Good morning everyone. 

Firstly I would like to thank everyone for attending the Annual General Meeting of the Scottish Borders Chamber of Commerce.  I am James Aitken and I am the Convener of the Chamber.   I will make further introductions as we go along.    

The order of events this morning is fairly straightforward.  I will talk about what has been happening in the Chamber over the past year and also a few other thoughts.  You will no doubt be relieved to hear I only intend to speak for 10 minutes or so.  I will then see if anyone has any questions. 

I will then ask Craig Little, the Chamber’s Treasurer, to give a review of our financial situation.  I understand that Craig has brought a number of copies of our accounts for anyone who would like a copy.

Then I will ask the other Directors if they would like to give a quick update on their respective business sectors. 

I will then invite any final questions from the floor.   

We should be finished the formal part of the AGM by around 9:15.  Please stay on if you can. 

So to the Chamber and the past year. 

The past year has seen the appointment of almost a completely new Board of Directors including myself as Convener.   

One of the first things the new Board did was to undertake a complete review of how the Chamber operates.  I will come back to this in a minute or so. 

In addition, and more importantly in my opinion, the Board asked themselves the following question:  is there still a need for a Scottish Borders Chamber of Commerce?  After lengthy discussions over a number of months, a majority of the Board said yes.  There was though a number of caveats.  These included that we must be financially viable, we must not be reliant on external funding, we must not be just another talking shop or “boys” club.  The Board also agreed to ask itself the same question at the end of this year.  I am pleased to report that progress is being made on these caveats.                    

Now to the day to day running of the Chamber.

Our finances are now in a much improved state.  However, to get to this position the Board, like many other businesses, has had to take some hard decisions in the past year to reduce our overheads.  That included the Board having to make a valued employee redundant.   In fact our sole employee.  This has meant an increased workload for the Directors. 

The Board also agreed to freeze our membership rates for this and the following year and to offer a discount for members rejoining within a month of the start of our new financial year.  As the Chamber no longer receives any external funding, and will not in fact seek further external funding, the Chamber is now almost entirely dependent on membership income.   Craig will cover our finances in more detail in a few minutes and will answer any questions you may have.

The Board has also had to deal with a number of problematic historical issues.    I am again glad to report that progress has been made on all of these historical issues and in particular the Border Works issue.   

The Board discussions have also resulted in a series of changes and improvements to the way we operate.    This is of course a work in progress and a great deal still needs to be done.    

Tne major change concerned communications and the appointment of a consultant, Harry McGrath, to deal with this vitally important task on our behalf.  Harry deals with both internal, our members, and external, the press to give an example, communications. 

This has included a new website which is regularly updated, regular emails to our members, a much improved twitter presence and more press releases.  The feedback we have received to date on these changes has been very positive. 

Other matters which we are still working on include membership, appointment of new Directors and events. 

On membership we are to begin a membership drive in August. 

As for Directors, a number of new Directors have already been appointed.  This is obviously an ongoing process.  I also intend to create an association of former Directors of the Chamber.  The advantages to the Chamber of keeping in touch with former Directors are obvious.    

On events Jim Mather, former Scottish Government Enterprise, Energy and Tourism Minister, and Alyn Smyth a Scottish Member of the European Parliament who has a particular interest in agricultural matters, have agreed to speak at events to be held in October and November respectively.   A third winter event involving Craig Little will be announced shortly. 

We are also considering holding a networking event every 2 months or so.  This is something we are going to ask our members for their views on in the next week or so. 

The review that the Board has undertaken would not be of much use if we had only looked at internal Chamber matters. 

A great deal of time has been spent considering our relationship with various bodies such as the Scottish Chambers of Commerce, neighbouring Chambers and other local business organisations, Scottish Borders Council and our local politicians.

Can I take this opportunity to thank Ged Cowans for his work with the Scottish Chambers on behalf of the Board.

Shortly after becoming Convener, Ged and I held a number of meetings with our neighbouring Chambers in the Lothians.  These Chambers were considering a merger and asked us if we also wanted to become part of a larger Chamber. 

One of the reasons why the Board unanimously rejected a merger was the amount of time taking up discussing the “City regions” policy.  I made the position of our Chamber clear.  Of course we want to work closely with our neighbouring Chambers, however, although we agree that Edinburgh is important to the Borders our links with Dumfries and Galloway and Northumberland are just as important to us. 

The Board’s position on this is straightforward.  The Borders needs a business organisation or even organisations whose priority is to represent the interests of the Borders business community.

Now to Scottish Borders Council and in particular its economic development department. 

To be clear I have not been impressed and I have made this clear to those I have dealt with.  The Chamber does not see its role to simply provide a token representative from the business community to the latest talking shop being mooted or document to sign in front of the press.   

That said, it is only a few weeks since the local elections were held.   It was clear from reading the various manifestos that each party and many of those standing as independents, see the economy as a priority.  That as far as we are concerned means a fresh start. 

I have already had a very constructive telephone conversation with Stuart Bell, the councillor now in charge of economic development.  I am meeting Stuart again in the next week or so and he has agreed to come and speak at our August Board meeting.   

I have also made it clear to Stuart that the Chamber will continue to campaign for a forum for all business organisations in the Borders.  You may be surprised to know that there are almost 50 such organisations in the Borders.  Instead of wasting time and effort trying to get these bodies to merge let’s try a different approach.   Let’s acknowledge and celebrate the fact that so many people are willing to try and help business flourish in the Borders.  I will continue to press on this.

Every politician I have met or spoken to is in favour of the idea of this forum.

That brings me nicely on to our meetings with our local politicians.

So far we have met or spoken to Michael Moore, Chic Brodie, John Lamont, Christine Grahame and a number of councillors including David Parker.  Other meetings are planned.   One interesting idea that arose from these meetings was the idea of MSPs holding surgeries specifically for businesses.   Another was arranging a meeting of all the South of Scotland Chambers.

A couple of final points. 

Let’s not forget that there are many great things going on in the Borders just now.  Eyemouth Harbour can now receive cruise ships, our first crematorium is now in operation, a second is almost complete, the Borders Book Festival, the Border Union Show, the new 3G Arena in Gala, mountain biking at Glentress, our common ridings.  I could go on and on.   

Then there is the return of our railway that should never have been taken away in the first place.  This is a fantastic opportunity for the business community in the Borders.  Let’s ensure that we fully realise its potential.   That includes making sure that Twedbank is not the final stop on this line.      

I would also like to take this opportunity to thank my fellow Directors, both past and present, for their continued support and all their hard work over the past year.  Our Directors do not even claim expenses.  In particular I would like to thank Fiona Drane, my predecessor as Convener, and Sally Scott-Aiton our former employee, for all the time and effort they put in to the Chamber. I would also like to thank Gordon and Kate for accommodating us today. 

Lastly, and by no means least, I would like to thank our members for their continued support.

The Scottish Government consultation can be found here.  The consultation paper seeks views on the Scottish Government’s proposals for a Land and Buildings Transaction Tax for Scotland to replace the current UK Stamp Duty Land Tax from April 2015.

This is important as it is effectively the beginning of a Scottish tax system.  

The consultation is also of a standard that we will now expect.   Previsous papers on corporation tax and excise duty, although not consultations, were simply not good enough.  Lessons clearly have been learned. 

The consultation ends on 30 August 2012. 

Where to start?  I think I will start with the Scottish Futures Trust.  I remember well the negative reaction to the SFT when it was first proposed.  The coverage the SFT has received this week shows how much things have changed.  The fact that the long term costs of PFI are now widely known also shows how good an idea the SFT was.  A report on this from the BBC news website can be found here.

This raises another issue.  Notwithstanding the fiscal powers debate it is clear Scotland is increasingly doing things its own way.  On areas such as health or education the differences are well documented.  Now Scotland is to have its own food standards agency and a new governing body for the Scottish canals.  This is not because of Calman or the Scotland Act but because of the actions of the UK Government.  Add to this the Revenue Scotland announcement and you see the direction in which things are moving.

Now to a subject I have written about before, the Crown Estate.  It is now difficult to find someone against devolving control over the Crown Estate in Scotland to the Scottish Parliament other than the present UK Government.  If the UK Government is not even willing to cede control over this body to the Scottish Parliament then it is easy to accuse them of not seriously engaging in the fiscal powers debate.  A report on the latest ploy by the UK Government to not devolve control of the Crown Estate to the Scottish Parliament can be found here.

Now to the UK Government’s so called “Heritage tax”.  “The Heritage Alliance is disappointed that the UK Government has refused – despite widespread opposition and strong challenges to the rigour of its evidence base – to reconsider its Budget proposal to remove zero rating of VAT on approved alterations to listed buildings.”  No sign yet of a u-turn on this proposal.  More on this can be found here.

The Sunday Times recently reported that Scottish Government advisor Dr Andrew Cameron has advised that a tax break, which would allow wealthy landowners and investors to plant trees in exchange for tax offsets, would help Scotland meet its forest coverage goals. That would of course require further tax powers to be devolved if this was to be just a Scottish tax relief.  Let’s also not forget that the last attempt at something like this was a complete shambles.  Hopefully if this idea is revisited lessons will have been learned.  A story on this issue from 2002 can be found here.

Now to the “shared services” debate.  The House of Commons Public Accounts Committee has found that a Whitehall scheme to share resources across departments has cost hundreds of millions of pounds more than it saved.  The scheme ran £500 million over budget, costing £1.4 billion, and of the five departments that took part, only one broke even.  A report on this from the Telegraph can be found here.  Sadly I am not surprised with this report.

Aggregates Levy is one of two other miscellaneous taxes recommended for devolving to the Scottish Parliament under the Calman Commission.  The other being Air Passenger Duty.  The UK Government has so far resisted devolving Aggregates Levy due to a European Court action by the British Aggregates Association.  An update on this from HMRC can be found here.  The UK Government are fast running out of excuses for not devolving Aggregates Levy.

I was not surprised to read that many elderly farmers are working long past retirement age because they fear losing agricultural property relief (APR).  APR is likely to reduce their liability to inheritance tax.  Their worries have been prompted by HMRC’s tactics of challenging APR on farmhouses at every opportunity.  A report on this from the STEP journal can be found here.

Now to matters slightly further afield.

The European Commission’s Brussels IV proposal to simplify the settlement of international successions has received the final backing of the European Union’s Council of Justice Ministers.  The regulation will come into force in 2015 and will apply directly in all member states, other than Denmark and the opting-out members UK and Ireland.  Hopefully this is something that the UK and Ireland will consider again in the near future.  A report on this from the European Commission can be found here.

Now to France.  As expected, France’s new Socialist government has announced a series of increases in personal and business taxation.  They include new wealth taxes and a tax on foreign owners of holiday homes.  A similar idea was floated last year by the Sarkozy administration but it was dropped when the French Government was advised that such a tax would not survive a challenge under European Union anti-discrimination legislation. Hollande may believe he can avoid this by calling the levy a “social charge” rather than a tax.  A report on this from the STEP journal can be found here.

The New York Times has published an article describing just how easy it is to set up a Delaware shell company without disclosing its beneficial ownership.  This is something that the US Government has regularly pilloried many other countries for.  Apparently Delaware has more corporate entities than people.  The article from the New York Times can be found here.

A Berkshire man has been convicted of evading £430,000 inheritance tax on a Swiss bank account he held jointly with his mother.  HMRC obtained Michael Shanly’s account details from the French authorities, who had bought them from a former employee of HSBC Geneva, who had stolen them from the bank.  This is a good example of the increasing co-operation between European countries and the increasing effectiveness of HMRC.  A report on this from the BBC news website can be found here.

Australia has introduced its highly controversial carbon tax, after years of bitter political wrangling.  The law forces about 300 of the worst-polluting firms to pay a A$23 (£15; $24) levy for every tonne of greenhouse gases they produce.  The Australian Government says the tax is needed to meet climate-change obligations of Australia – the highest emitter per-head in the developed world.  A report on this from the BBC news website can be found here.  The environmental taxation debate in the UK, in contrast, has slipped down the political agenda over the last few years.

I think I will end with Cyprus.  The Cyprus government will not agree to cut its 10% corporation tax rate in order to secure a European rescue of its banking sector and public finances.  Cyprus may though have to agree to a further VAT increase as part of these negotiations.  Cyprus is taking a similar stance to the one taken by Ireland over the last couple of years.  A report on this can be found here.

Have a good weekend.

When someone dies, there can often be a number of government departments and agencies to notify.  For example, a passport or driving licence may need to be cancelled, or benefits stopped.  The “Tell Us Once” service is designed to make things simpler for you, by helping you give this information to government only once.

Once you have registered the death, the registrar will tell you about your options for using Tell Us Once.  These are:

• in person, by making an appointment with your local authority bereavement adviser
• by phone – the registrar will give you the phone number
• online

After you have used the Tell Us Once service, the relevant government departments and services will be contacted on your behalf.  Depending on your circumstances these may include:

• Adult Services (social care for adults)
• Children’s Services
• Council Housing
• Council Tax Office
• Disability and Carers Service
• DVLA (driving licence agency)
• HM Revenue and Customs (for Child Benefit, Tax Credits and personal taxation)
• Passport Service
• Pension Service

The information you give to the adviser is only passed on to the government departments that need to know.

More on this can be found here.

Time for another “tax land”.

Where to start?  Jersey seems as good a place as any.  Jersey is also considering its constitutional options.  This is not new news.  I was in Jersey a couple of years ago and independence was also being discussed amongst the lawyers I was meeting.  Jersey is in a different position to Scotland as it is for all intents and purposes already fiscally autonomous and is a British Crown dependency.  An article on this from the Guardian can be found here.  This is from the Guardian article:

“A barrage of regulatory clampdowns and political attacks on the Channel Islands’ controversial financial industry has prompted one of Jersey’s most senior politicians to call for preparations to be made to break the “thrall of Whitehall” and declare independence from the UK.  Sir Philip Bailhache, the island’s assistant chief minister, said: “I feel that we get a raw deal. I feel it’s not fair.  I think that the duty of Jersey politicians now is to try to explain what the island is doing and not to take things lying down.  The island should be prepared to stand up for itself and should be ready to become independent if it were necessary in Jersey’s interest to do so.”

It seems that the constitutional genie is well and truly out: Scotland, Falkland Islands, Jersey and now it seems on UK membership of the European Union.

Now to the announcement by the Scottish Government of its intention to create its own tax administration and collection agency, to be called Revenue Scotland.  Its main job initially will be to administer the two new Scottish taxes devolved under the Scotland Act.  The fact that it is to work closely with Registers of Scotland and the Scottish Environment Protection Agency, also makes sense.  These new taxes, a Scottish Stamp Duty Land Tax and a Landfill Tax, will be directly linked to the work done by these organisations.  A press release from the Scottish Government on this can be found here.

As regular readers of this blog will know I have been writing about this issue for many years now.  Whilst I welcome this announcement I still think we need to be more radical.  We need to review all government tax, law and registration services.

I was not surprised to see some negative comments about the Revenue Scotland announcement. However, if Scotland has its own tax system it needs its own tax administration and collection agency.  That applies just as much under the Scotland Act as independence.  That though is not the only reason.

Let’s not forget the fact that UK tax law is based on English legal principles, or how HMRC and HM Treasury dealt with the introduction of Stamp Duty Land Tax in Scotland, or the inheritance tax changes to trusts, or the proposed planning-gain supplement, or the Scottish Government’s local income tax proposal or VAT and the new Scottish police and fire services.  All good reasons for welcoming Revenue Scotland.

The Scottish Government is in no doubt that Revenue Scotland will be able to administer the new Scottish taxes at a lower cost than HMRC.  I agree with that.  I have also noticed that no-one seems to remember one of the more ridiculous claims made when the Calman Commission proposals were being debated.  The Scotland Office claimed that the cost of administering a separate Scottish tax system would be the same as the present UK system.   Complete and utter nonsense.  The Scotland Office paper can be found here.

One last point on Revenue Scotland.  I met with a number of Scottish Government officials just before the 2011 Scottish election on this issue.  It was quite clear that they wanted nothing to do with this idea and only met with me at the insistence of a Scottish Minister.  Thank you Jim Mather.  I wonder if their attitude has changed in any way?  Let’s hope so as this is just the start.

The Scottish Government has also published its consultation on a Land and Buildings Transaction Tax.  This will replace Stamp Duty Land Tax.  The consultation for Scotland’s replacement to Landfill tax will follow later this year.  I use the word “summer” advisedly.  The consultation can be found here.

And there’s more.  The Scottish Government has finally published its consultation in a “plastic bag tax”.  The consultation can be found here and a press release from the Scottish Government here.

Even the UK Government is playing its part.  The UK Government is consulting on whether to allow the Scottish Government the power to issue its own bonds.  The move would potentially allow Scottish Ministers to raise hundreds of millions of pounds.  A provision in the Scotland Act 2012 has already enabled the UK government to amend the way in which Scottish Ministers can borrow from 2015-16.  An article on this from the BBC news website can be found here.  The consultation can be found here.

One last point on fiscal powers.  The UK government is reportedly considering proposals to devolve complete control of income tax if Scotland votes ‘no’ in the independence referendum.  This sums up nicely what is wrong with the UK Government’s approach to this debate.  If the UK Government has a serious proposal to make, make it.  If not be quiet.

Now to tax and morality.  David Cameron branded comedian Jimmy Carr “morally wrong” for seeking to avoid paying his fair share of tax.  Mr Carr is understood to use an aggressive, though legal, tax avoidance scheme which enables members to pay income tax as low as 1%.  This is dangerous territory for David Cameron.  Already the press have published the names of many others who are involved in similar schemes.  If David Cameron seriously wants to tackle this issue he must act against all those who seek to evade tax.  Has he considered the public disclosure of all tax returns or a minimum percentage of tax that must be paid?  I suspect not.

This is not just a UK Government issue.  The Herald discovered that Transport Initiatives Edinburgh used tax loopholes to allow directors to avoid paying income tax rates on £1 million in fees and bonuses. The company, which closed last year due to its handling of the trams project, paid directors and consultants through their firms.  As a result, they were subject to 20% corporation tax rather than 40% income tax.  The article from the Herald can be found here.

The evidence that the “rules” do not apply to everyone is growing.  Whether it is the 3,000 UK civil servants being paid through a company, or the payments made to those who were partially responsible for the trams fiasco in Edinburgh or the celebrities avoiding tax.  I am resisting the urge to say it was ever thus but in times such as this it does seem even more reprehensible.

One last point.  I often am quite critical of HMRC.  I would argue for good reason.  That said, is it really time to cut 10,000 jobs?  An article on this and the proposed strike by HMRC staff can be found on the BBC news website here.

Have a good week.

Great to see progress at last on a Scottish tax system.

One of the first steps is the Scottish Government’s consultation: Taking Forward a Scottish Land and Buildings Transaction Tax.   The consultation document can be found here. 

The consultation runs to 30 August 2012.

This is from the website of OPG Scotland.

“The Public Guardian is aware of the significant problems experienced by attorneys, withdrawers and guardians when dealing with banking institutions and other fund holders. There is a regular programme of awareness raising and training with fund holders to try and reduce these difficulties but this makes little impact at the present time. The Equality and Human Rights Commission are keen to hear from individual attorneys, withdrawers or guardians, who encounter such difficulties and with permission may be able to raise a legal challenge against a fund holder on the grounds that they are treating incapable adults less fairly than a capable person. The Commission can be contacted:

• By e-mail scotlandhelpline@equalityhumanrights.com or
• By telephone on 0845 604 5510 or
• In writing to Equality and Human Rights Commission Helpline Scotland
  Freepost RSAB-YJEJ-EXUJ
  Equality and Human Rights Commission
  PO Box 26961
  Glasgow, G2 9DU”

More on this can be found here.

We are on holiday until Monday 18 June.  Our blogs will resume then.

Not a great week for the UK Government and in particular George Gideon Oliver Osborne.  The problem here for the coalition government is not just the fact that there has been three U-turns in one week, it is the feeling that the March Budget was a bit of a shambles.  I would not go as far as that but it does seem a bit odd to me that so much was made of the so called “pasty” and “caravan” taxes and not that the UK Government did not even consider reducing VAT on repairs and renovations on residential property. 

As suspected the proposed cap on tax relief for charitable donations has been dead in the water for a number of weeks.  All we heard this week was  confirmation of that fact.  One final point on this.  These three U-turns come at a cost of approximately £150m.  Where is that revenue now to come from?   

“Flat rate” taxes were all the rage a few years ago.  Personally I have not been persuaded by the arguments put forward.  That said, as we start to think about how a Scottish tax system might look flat rate taxes should also be considered.  The latest call again came from those generally regarded to be on the political “right”, the TaxPayers’ Alliance and Institute of Directors.  In addition to arguing for a single rate of income tax the usual noises were made for the tax system to be simplified.  No-one is likely to argue against a simpler tax system until specific proposals are made.  For example, recent changes to the amount of personal allowance for those aged over 65.  This change has been termed the “granny tax”.  I did though like the idea of abolishing certain taxes although not necessarily those listed in this report.  It is claimed that the cost of these proposals would be met by prolonging the UK Coalition’s spending cuts by an extra five years.  More on this can be found here.  The report also claims that these changes would increase gross domestic product by 8.4% over 15 years.

Again on tax rates.  According to City A.M. the UK has continued to raise taxes while most other European Union countries tax rates have fallen.  The European Union average top rate of income tax decreased from 44.8 to 38.1% between 2000 and 2012.  In this same period, the UK’s average rose from 40 to 50% although the top rate is to fall from April 2013.  Unless of course we see another U-Turn.  The UK has though followed the European Union wide trend for raising VAT.  The average rate has risen from 19.2 to 21%, with the UK’s up from 17.5 to 20%.  The report from City A.M. can be found here.

Some stories do not surprise you in any way.  This is one of them.  Taxpayers are spending more than £1 million every month on the rent and upkeep of empty fire service control rooms that have never been used.  Details revealed under Freedom of Information legislation show that only one of the nine Fire Control centres is operational, despite the fact that taxpayers will continue to pay for their upkeep for up to 20 years.  This was reported in the Times on 24 May. 

Then there are stories that do surprise you but shouldn’t.  This is one of them and is also a story I have covered recently.  3,000 civil servants are employed by private firms in order to keep their tax bills down.  By remaining off the UK Government’s payroll, thousands of officials are avoiding paying national insurance contributions and are able minimise their overall tax contributions.  The report from HM Treasury can be found here.    

Good news that could have been even better news.  HMRC collected an extra £4.32bn during the last five years.  This is 11 times greater than the investment made for collecting this extra revenue.  However, a House of Commons Public Accounts Committee report claims that another £1.1bn could have been collected without job losses at HMRC.  A report on this from the BBC news website can be found here.

The International Monetary Fund (IMF) and in particular its managing director Christine Lagarde, is rarely out of the news these days.  Lagarde has said said that the UK economy had underperformed and unemployment remained much too high.  The IMF urged the UK Government to consider cutting interest rates and a further round of quantitative easing.  Ms Lagarde also said that UK ministers should prepare a plan for a worse economic environment which could include a cut in VAT.  However, the IMF also said that the UK Government should not divert from its aim of deficit reduction.  A report from the BBC news website can be found here.    

How to win friends and influence people.  Political parties in Greece have criticised Christine Lagarde for suggesting that Greeks were avoiding paying taxes.  Socialist leader Evangelos Venizelos accused Ms Lagarde of “insulting the Greek people”.  A report, again from the BBC news website, on this can be found here. 

There may be trouble ahead.  The UK Supreme Court has ruled that HM Treasury breached European Union law by retrospectively blocking tax refund claims.  The amount involved could be as much as £5bn.  Not surprisingly, HMRC has said that it is “considering the implications of this complex judgement carefully.”   A report on this from City A.M. can be found here. 
 
Now to what some might consider an overreaction.  Some US politicians are so irked at the idea that Americans are renouncing their citizenship to avoid tax, that they are introducing a new Senate bill to tax them forever.  A report on this from ABC news can be found here.  In addition, Congress is close to approving a law under which the Internal Revenue Service will be able to revoke the passports of Americans who owe substantial unpaid taxes.  An article from the Wall Street Journal on the passport claim can be found here. 

I think I will finish with fiscal powers.  HMRC is under no obligation to implement any tax proposal made by the Scottish Government under the Scotland Act.  HMRC can effectively veto any proposal if it differs too greatly from the UK system.  A report on this from the Herald can be found here.  I find it worrying that anyone is at all surprised about this.  I would be even more worried if I thought that anyone actually believes that HMRC and HM Treasury are happy to see tax powers being devolved.  I suspect that there are very few people in HMRC and HM Treasury who are happy to see the beginning of the end for a unified UK tax system.  An earlier blog on this point can be found here.     

Also on fiscal powers.  I still think it is unlikely that the so called “second question” will be asked as part of the independence referendum.  What will those who are arguing for “devo plus” and/or “devo max” do?  Will they vote for independence or the status quo and the hope of something more in the future?  This is an issue I will come back to after my well deserved holiday.  

Have a good weekend.