IMF Highlights Greek Tax Evasion

A recent IMF report has criticised the Greek Government in its strategy to bring its debts under control. 

The report highlights that the strategy “has relied far too much on cuts in discretionary spending and increased taxation of wage earners, while the rich and self-employed have continued to evade taxes on an astonishing scale and bloated and unproductive state sectors have seen only limited cuts”.

One of the conclusions of the report is that the programme will fail unless it overcomes “these entrenched vested interests”.

The report also highlights that Greece will need from the EU an extra £7.9bn to bring its debts under control. 

Written by Tim Corfield - Griffin and King

http://www.griffinandking.co.uk/

MORTGAGES AND PAYDAY LOANS

Everybody knows it’s more difficult to get a mortgage these days. 

But, did you know that at least one of the leading mortgage providers rejects anyone who has taken a payday loan in the past 3 months or who has had two or more payday loans within a year? 

This rule applies even when the loan has been repaid in full and on time. 

Written by Tim Corfield

DEBTS SOAR FOR OVER 55’s

Recent insolvency statistics make grim reading for the older generation.

In the second quarter of 2011 the typical debt level for the over 55’s was just over £17,000. By the second quarter of 2012 the figure is now nearly £25,000 – an increase of over 30%.

Tim Corfield commented “Yes, the figures are worrying. Research also shows that the cost of living for pensioners has risen by 20% due to food inflation and the increasing cost of household utilities. This is the wrong time of life to have financial problems. Let’s hope the insolvency and debt industry can make a better job of assisting these people than their lenders ever did”.

Tim Corfield - August 2012

WHY THE HURRY TO PRODUCE GDP FIGURES IF THEY COULD BE MISLEADING?

We are now being told that better than expected construction figures may well mean that the second quarter GDP figures published last month will be revised upwards. The Office for National Statistics (ONS) reported last month that the economy shrank by 0.7% and based on this more recent data this may well now be revised upwards to 0.5%. 

The initial estimate was based partly on the assumption that construction output fell by 5.2% but now more data has been analysed, the ONS believe that the reduction was only 3.9%.

The ONS admits that much of the data gathered for the second quarter was a ‘best guess’. It bases its initial estimates solely on a monthly survey of 44,000 businesses covering the production, manufacturing, services, retail and construction industries. It polls firms of all sizes, but admits that those with fewer employees are less likely to be included – meaning that small fast growing businesses would be excluded from the calculation.

By the time the preliminary estimate is released, the ONS will have around 70%to 80% of responses back from its survey covering the first two months of the quarter (April and May) but for June the responses received is only around 20% to 30% and the ONS fill in the gaps based on historical data and a lot of assumptions.

The ONS admits that the bad weather and extra bank holiday made the estimate ‘more challenging’! These figures are unlikely to be fully revised for up to five years by which time who will care! Are we really to believe that Spain’s economy declined by 0.4% while the UK’s economy was down by 0.7%?

Tim Corfield commented “Given the political turmoil that these figures can produce and influence on business wouldn’t it be better to hold fire with producing figures that could indicate the wrong trends? Sending out the wrong signals could be damaging for the economy.” 

Andrew Sentence (a former member of the Bank of England’s monetary policy committee) has called for the ONS to include broader data including employment information. He commented “What the ONS is not very good at is taking a common sense view of economic data. They need to be much better at cross-checking technical data to give a true picture.”

Written by Tim Corfield

http://straightalkdebt.com/

Borrowing Overshoot is a Blow to George Osborne

Recent data in shows that the State borrowed more in June this year than it did in 2011. The public sector borrowed £14.4bn which is £500m more than in 2011 and £1bn more than the market expected.

Statistics, produced by ONS (Office for National Statistics) showed that borrowing for the financial year to date is £6.8bn higher than for the same period twelve months earlier - which puts under threat the borrowing targets for the year. 

These figures are the result of the economy falling back into recession which has a significant bearing on tax revenues and social spending. 

June’s figures show a 0.1% drop in income tax raised to £10.8bn while spending on social benefits, including unemployment rose by 2.3% to £15.4bn.

Recently the IMF (International Monetary Fund) has slashed http://www.griffinandking.co.uk/ forecast GDP Growth for the UK to just 0.2% for 2012.

These figures highlight the importance of the UK returning to growth. The IMF has warned that austerity should be eased in 2013 if the economic recovery fails to materialise.

written by Tim Corfield.

http://straightalkdebt.com/

R3 comments on Government’s response to the personal insolvency review

“R3 welcomes the Government’s announcement today to consult on increasing the petition debt levels for creditors. R3 believes that a rise from the current level of £750 to £3000 would be a more appropriate sum for a creditor to petition for bankruptcy.

“R3 has long campaigned for the rebalancing of the relationship between debtors and creditors, as a number of creditors petition for bankruptcy on low levels of debts. The threshold of £750 which was set in 1986 is now outdated. The Government today acknowledged: ‘that to be able to threaten someone with bankruptcy for such a small amount is disproportionate.’ We are pleased the Government is listening to R3’s concerns on this issue.

“The Minister also revealed that the Government recognises the potential for regulatory reform of Debt Management Services. We have called for better regulation of the Debt Management Plans (DMP) industry for some time. R3 research shows that DMPs are often unworkable because the level of debt is too high, and 10% of individuals in a fee-charging DMP were not told they would be charged until the scheme began. We call on the Government to go beyond recognising the need for reform and make the necessary changes to the industry. R3 suggests the regulation of the DMP market be removed from the OFT and become the responsibility of the Insolvency Service, to ensure all insolvency providers are regulated to the same high standard.”

Appointment of Administrators - 17 June 2011

Jun 17 2011
3B VIEW LIMITED
ALFA SELF-STORAGE (HERSHAM) LIMITED
BARTHOLDI LIMITED
KYMO HOLDINGS LIMITED
LONSDALE LEISURE LIMITED
MINMAR (929) LIMITED
PAPERVATION LIMITED
REDCARE TELECOM LIMITED
SEAFLAME COMPANY LIMITED
V8 GOURMET LIMITED

HMRC to extend its tax campaigns

HM Revenue and Customs (HMRC) has announced that it intends to target more groups of workers in its efforts to recoup unpaid taxes.

Last month, HMRC launched a campaign aimed at businesses that might be trading above the VAT threshold of £73,000 but have yet to register with the tax authorities.

Now HMRC will be looking at e-marketplaces and private tuition providers in an effort to tighten up the tax-take.

The campaigns should be rolled out in 2011/12.

As part of the new campaigns, those who provide private tuition and coaching will come under the spotlight. The aim is to look at professionals who are able to earn money from providing tuition and coaching, either as a main or a secondary income.

It will cover people providing private lessons and could include, for example, fitness/dance/lifestyle coaches through to national curriculum subject tutors and others.

Another target for HMRC will be those who use e-marketplaces to buy and sell goods as a trade or business and who fail to pay the tax owed. People who only sell a few items and who are not traders are unlikely to be liable to tax and will be excluded from the investigation.

Following on from the recent offer of a partial amnesty to businesses working in the plumbing industries, HMRC also said that it would be inviting other groups of tradespeople to come forward and declare unpaid tax.

Mike Wells, HMRC's director of risk and intelligence, said: "We want to make sure HMRC listens to as many informed views as possible for our future campaigns. We want the views and experience of people and organisations outside the department to play a fuller part in the campaigns that we design for customers.

"By being open about our areas of interest for the coming year we hope to maximise that exchange of information and ensure we reduce the tax gap and help customers pay what they owe.

"We will use the information we gather to pursue people who choose not to use the opportunities we provide for them to put their affairs in order on the best possible terms. It will be more expensive if we come and find people, so I urge them to come forward and disclose voluntarily."

So far, more than £500 million has been raised by HMRC from voluntary disclosures and a further £100 million from follow-up activity.

Business debt under the weather

Statistics on debt judgments in England & Wales released today (May 24) by Registry Trust Ltd show that the total value of county court judgments (CCJs) issued against businesses rose 14.4 percent (£19.6m) from £136.2m to £155.8m in the first quarter of 2011.

Registry Trust is the non-profit organisation which operates the Register of Judgments, Orders and Fines for England and Wales on behalf of the Ministry of Justice in the public interest.

Year on year the value of CCJs against businesses has fallen by 11.2 percent or £19.6m from £175.4m to £155.8m

Judgment numbers reflect a similar pattern in that they rose 8.9 percent over the last quarter but fell 7.2 percent year-on-year. Businesses in England and Wales faced 37,794 CCJs in Q1 2011, compared with 34,713 in the previous quarter and 40,711 during the same period of 2010.

This quarter a record 23,832 searches were requested. Anyone can search the registers online at www.trustonline.org.uk.

Announcing the statistics Malcolm Hurlston, Registry Trust chairman, said:

“The weather was blamed for the sluggish performance of the economy in the last quarter of 2010 and could be one of the reasons for an increase of judgments against businesses in the first quarter of 2011.

P35 (PAYE) Deadline 19 May: Comment from Frances Coulson, President of insolvency trade body R3

“Typically many businesses will be caught out by the P35 deadline on 19 May, having been ‘getting by’ and not submitting the full amount of PAYE they owe each month. This deadline is traditionally a time when HMRC uncovers any shortcomings in the payments due and the payments made in terms of PAYE, as well as those businesses which do not file at all.

“I suspect this will lead to an increase in actions by HMRC in a couple of months time, as well as pushing up corporate insolvency numbers towards the end of the year.

“One in four (24%) businesses are concerned about their debts, according to the R3’s latest Business Distress Index. Of this group, 37% are worried about Crown debts and this deadline will be a test for them. Seeking professional advice as soon as possible is the best way to allay those fears.”

Frances Coulson, R3 President

Methodology note on R3’s Business Distress Index: BDRC Continental conducted 501 telephone interviews with small, medium and large business owners and Financial Directors between 7th and 18th March 2011. Quotas are set by size, region and sector and the data weighted to the profile of GB businesses. The respondent in each case is a senior financial decision maker. Small businesses are those with a turnover of £50,000 to £1million pa.

R3 is the trade body for Insolvency Professionals, representing 97% of the UK’s Insolvency Practitioners.

Credit Action releases May Debt Statistics

May 6 2011
Money education charity Credit Action has today released the May debt statistics, a monthly release which details the level of debt in the UK.
Key statistics from the release, which shows month-by-month trends, include:

* CAB deal with 8,004 new debt problems each working day
* 1,392 people are made redundant daily
* 847,000 people have been unemployed for more than 12 months
* £55,870 is the average household debt (including mortgages)
* £29, 843 is the average amount owed by every UK adult (including mortgages)
* £180m is the personal interest paid in UK daily
* £24.88m is the daily write-offs of loans by banks & building societies
* Every 17 minutes a property is repossessed
* £67.90 is the amount it costs to fill a car with a 50-litre tank with unleaded petrol
* £133,200,000 is the daily increase in Government national debt (PSDN)
* £1,156,000,000 is the total value of all purchases made using plastic cards today

Joanna Parsley, Associate Director at Credit Action says, "May's debt statistics show some interesting trends. Although the amount owed by every UK adult has fallen by approximately £30, in light of rising credit card interest rates- which at an average of 19.1% are now at the highest levels seen in 13 years- paying down debt has never been more sensible advice.

"With the cost of petrol rising still and with households experiencing the changes made last month to tax, national insurance and welfare benefits, 2011 looks set to be a year where household budgets are further squeezed."

The full debt statistics can be accessed from the Credit Action web site:
http://www.creditaction.org.uk/helpful-resources/debt-statistics.html

Mediocre GDP figures highlight need to nurture fragile recovery

Commenting on the GDP preliminary estimate for Q1 2011, published today by the Office of National Statistics (ONS), David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“These figures were mixed and well below the OBR prediction that the economy would grow by 0.8% in the quarter. On the basis of these figures, we reiterate our forecast that in 2011 as a whole GDP is likely to grow by 1.4%, much lower than the OBR’s expectation of a 1.7% increase. There are some positive features in these figures, particularly the 1.1% growth in manufacturing and the 0.9% increase in services. But construction fell sharply for a second quarter in a row and the economy’s overall performance is still mediocre. Total economic activity has only just returned to the levels seen in the third quarter of 2010.

“Given the fragility of the recovery, it is vital for the Government to persevere with policies that support growth, and remove the obstacles that prevent businesses from creating jobs and exporting. For the MPC, these figures reinforce the case for postponing increases in interest rates until much later in the year. It is crucial to avoid any measures that could derail the recovery.”