Poor Economies to Blame for Low Corporate Tax Take - We Say... 
Chas Roy-Chowdhury, Head of Taxation at the Association of Chartered Certified Accountants, cites a report from RMIT University School of Economics in Melbourne, Australia, which suggests that aggressive tax planning by multinational corporations is not eroding the international tax system and that there is no evidence to support the belief that UK or the US corporate income tax base is being worn away.

Rather, poor economic conditions have resulted in falling corporate income tax revenues in recent years, the study says. Mr Roy-Chowdhury concludes that while the corporation tax system should be modernised, policy makers and legislators would be well served by considering all the facts.

Source: Financial Times”

We Say: “Policy makers and legislators would be well served by considering all the facts”? What a novel proposition. Completely unworkable of course: the flaw in the proposal is that in order to put in place policies and legislation you first have to get elected: and to get elected you have occasionally to seek the endorsement of some percentage of the electorate. OK, it’s only every 5 years or so and it’s only a small percentage of swing voters you have to worry about, but it does slightly constrain your ability to act exactly as you please: and sadly it’s much easier to put a case to the electorate based on half-truths, spin, prejudice and self-interest than one based on the facts. Facts can be a bit inconvenient electorally. And once you’re elected, dealing with facts is much less fun than dealing with fiction: imagine how much less enjoyable St Margaret Hodge would find her baiting of lesser mortals hauled before her if she were limited to tedious facts. It’s the same with books: fiction outsells non-fiction. Mind you, 2013’s UK best-seller was apparently Alex Ferguson’s autobiography – we’re not sure which category that falls into…

For more information, please contact London Accountants Berg Kaprow Lewis.



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Lib Dem MP Urges 40p Tax Rate - We Say... 
Former Liberal Democrat Foreign Office and Home Office minister Jeremy Browne has accused the Coalition of timidity in reducing the 50p income tax rate to 45p and has called for the top rate of tax on incomes over £150,000 a year to be cut from 45p to 40p.

In his book, Race Plan: An authentic liberal plan to get Britain fit for the global race, Mr Browne states that: "Authentic liberals should […] feel uneasy about confiscatory levels of taxation. The 50p rate had, at the heart of the policy, the assumption that an individual had no more claim to his or her private income than did the state. A 45p rate is less presumptuous, but it is still too high."

Source: The Independent Independent i

We Say: Blimey! That’ll be Mr Browne permanently excised from Mr Clegg’s wholly-inclusive-and-definitely-non-religious-or-do-I-mean-multicultural-mid-winter-event card list then. He’s right, of course: the fundamental point that we’ve been banging on about for what seems like (especially to readers of this blog, perhaps) forever is precisely the one made by Mr Browne: my earnings are my earnings, not the state’s. This basic truth is undermined when government starts to describe tax reliefs as “public expenditure” and “public subsidy” (as it nowadays does). Reducing tax rates or introducing tax reliefs is not in any real sense “public expenditure”: it’s simply allowing oppressed taxpayers to keep more of what is theirs.

For more information, please contact London Accountants Berg Kaprow Lewis.



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PM’s Pride Over Tax Cuts - We Say... 
David Cameron has spoken of his “pride” at having cut tax by almost £2,000 for the typical worker.

Mr Cameron has commenced on a regional tour to highlight increases in the tax threshold.

Figures from No 10 show that between 2010/11 and 2014/15, the cumulative income tax cut by this Government for the typical taxpayer will be £1,824.

Mr Cameron said: "Nearly 9 out of 10 hard-working people across the country will benefit from this tax cut on Sunday - and it's one of the proudest things I have done in government."

From April 6, the personal allowance at which people start to pay income tax will be raised from £9,440 to £10,000. The allowance will rise to £10,500 next year.

The employment allowance also comes into effect on Sunday, giving more than 1m businesses and charities up to £2,000 off their NICs for employees.

Source: The Daily Telegraph Daily Mail

We Say: We believe we have a head for numbers – not sure whose head it is: nobody’s asked for it back – including birthdays and anniversaries, and we recall that the day of the PM’s announcement was also the birthday of Adrian Mole, (fictional) diarist extraordinaire. In light of that, how could we not write in our blog, even at the risk of falling short of A Mole’s intellectual heights? More on falling later.

It’s good to know that Mr Cameron has been finding something to do in between chillaxing with Fruit Ninja (it’s a game, apparently) and posing for photos with his telephone – sorry, being caught unawares in a natural-looking snapshot of political activity that happened to find its way onto Twitter in a break with customary modesty. We don’t begrudge him his pride, questionable though its relevance may be. It’s just that we have a head for sayings too and can’t help recollecting the one about what pride precedes. And the idea of Cameron on tour does raise a smirk. Does he have roadies? How careful will they be with their banana skins?

For more information, please contact London Accountants Berg Kaprow Lewis.



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Nannies Not Classed as Employees - We Say... 
The Daily Mail notes that the new £2,000 NI tax break for employers will not extend to parents who hire nannies.

HMRC says that families who take on nannies are not classed as employers, as they are buying a 'personal service', the paper says.

Siobhan Freegard, of parenting website Netmums, comments: “You are expected to treat a nanny as an employee. If you were caught paying them cash in hand you'd feel the full weight of the law. So, it seems bizarre parents are being told they must miss out on tax breaks.”

Source: Daily Mail

We Say: Daily Mail: a publication that includes ‘ail’ in its name, twice. That’s all we have to say about that. When we fancy a break from the abacus, we have been known to dabble in wordplay, and talk of nannies reminds us of one of our benchmarks. In one episode of the TV series CSI: Miami, the murder victim was a nanny. The episode’s title? ‘CSI: My Nanny’. Should you ever feel that our blog posts or tweets contain a more shameless pun than that, please tell us. It means we’ve made it.

For more information, please contact London Accountants Berg Kaprow Lewis.



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IHT Threshold Pledge Flawed - We Say... 
A Financial Times editorial piece suggests that the Conservatives’ revived pledge to raise the inheritance tax threshold to £1m is flawed and would be socially unjust in continuing times of austerity.

The paper claims the current threshold will not necessarily penalise large parts of the middle class, despite predictions that nearly one in ten estates will be liable for IHT in the next five years and that, in addition to the £3bn cost to the Treasury of a £1m threshold, the very wealthy will always be able to afford advisers to ensure they do not have to pay it.

Source: Financial Times

We Say: One question persists: if (and it’s a giant if) the meek ever do inherit the earth, what will the IHT be?

For more information, please contact London Accountants Berg Kaprow Lewis.



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