Welcome to the August 2011 Newsletter from RMT Accountants & Business Advisors Ltd

HM Revenue and Customs has apologised for failures in its services following a critical assessment by MPs.  In a new report, the Treasury Select Committee found 'considerable dissatisfaction' with the service provided by the department, with 'endemic' delays and failure to answer phone calls amongst the concerns raised.

Meanwhile, the Government has announced the locations of 11 new enterprise zones as part of its 'Plan for Growth'. Prime Minister David Cameron said he hoped the new sites, which will benefit from cheaper business rates, superfast broadband and lower levels of planning control, will become 'trailblazers for growth, jobs and prosperity'.


Taxman apologises for 'poor performance'

HM Revenue and Customs (HMRC) has apologised to taxpayers after a new report exposed a raft of problems with its services.

The chairman of HMRC, Mike Clasper, admitted that the Revenue was 'not happy' with its performance in 2010, adding that it had been 'overwhelmed for a period of time'.

A recent report by the Treasury Select Committee highlighted numerous problems with the department, including 'endemic' delays in answering letters and failing to answer phone calls.

'[Our performance] simply wasn't good enough on post and telephone and I'd like to take the opportunity to apologise to the people who had to take a long time to get through, or we didn't get back to them quick enough with the post,' said Clasper.

He continued: 'In 2011 we've been working very very hard to improve things. We're handling the calls immediately much more frequently than we did in 2010 and as far as individual customers are concerned you know the post levels have dropped in half.'

The MPs' report blamed bad management, excessive job cuts, demoralised staff and increasingly complex tax laws for HMRC's unsatisfactory level of service.

'The evidence we have received in this inquiry has been disturbing,' commented MPs. 'HMRC's delivery of services to the general public has fallen to unacceptable levels in several areas. We are concerned that HMRC's performance will continue to deteriorate if further reductions in resources are badly managed.'

Some of the recommendations outlined in the Committee's report include:

  • Improving the service provided by contact centres, particularly in relation to escalating complex queries and providing alternatives to 0845 numbers
  • Providing a robust alternative to online contact, including more cost-effective ways of providing face-to-face advice
  • Ensuring greater awareness of the impact of process changes on individuals and businesses, in particular recommending senior staff spend time with tax practices, charities and businesses
  • Ensuring reductions in resources are managed in a way that is commensurate with the enabling IT and process improvements and minimises the loss of departmental tax expertise
  • Better targeting of letters that threaten serious consequences against individuals.

However, the report acknowledged that HMRC does a good job in collecting taxes and performs 'a crucial role' under 'significant external pressures'.

Following the report, HMRC said it has recruited an additional 1,000 contact centre advisers to handle calls during 'exceptionally busy periods'.

We can deal with HMRC queries on your behalf - please contact us for details of how we can help you.


Cameron pledges to support business as latest enterprise zones revealed

The Government has announced the locations of 11 new 'enterprise zones' in England in a bid to boost local economies.

It is hoped the new sites, which will benefit from cheaper business rates, superfast broadband and lower levels of planning control, will create 30,000 new jobs by 2015.

Plans to create 21 new enterprise zones nationwide were first unveiled in the Chancellor's Budget in March.

The enterprise zones previously announced were: Leeds, Sheffield, Birmingham, Bristol, Liverpool, London, Manchester, Derby, Nottingham, the Black Country, the Tees Valley, the West of England and the North East.

Now Warrington, Cornwall, Gosport, Norfolk, Hereford, Kent and Oxfordshire, Essex, Suffolk, Northampton, Leicestershire, Cambridgeshire and Humber Estuary will also become targeted zones for enrichment.

The Prime Minister David Cameron said: 'We are determined to do everything we can to make Britain the best place in the world to start and grow a business.

'Enterprise zones are a major step towards delivering this - cutting business taxes, easing planning restrictions and giving business the tools they need to invest and expand.

'These new enterprise zones will be trailblazers for growth, jobs and prosperity throughout the country.'

Under the plans, businesses that move into an enterprise zone during the course of the Parliament will benefit from a 100% business rate discount - worth up to £275,000 - over a five year period.

In addition, the Government and local authority will help to develop radically simplified planning approaches in the zone, as well as providing support to ensure superfast broadband is rolled out.

A complete list of the new enterprise zones can be found on the Department for Business, Innovation & Skills website.


ESSENTIAL TAX DATES AND DEADLINES

31 August Annual adjustment for VAT partial exemption calculations (May VAT year end).

30 September End of CT61 quarterly period.
Last day for UK businesses to reclaim EC VAT chargeable in 2010.

For more information on key tax dates and deadlines, visit our 2011/12 Tax Calendar.


QUOTE OF THE MONTH

'I've said with the 50p rate I don't see that as a lasting tax rate for Britain because it's very uncompetitive internationally, and people frankly can move.'

Chancellor George Osborne signals that the 50% top rate of income tax may be scrapped


WEBSITE OF THE MONTH

www.mentorsme.co.uk

New scheme that connects companies with mentoring organisations.


ON OUR WEBSITE

2011/12 tax and financial strategies

Discover how to maximise your business and personal wealth with our 2011/12 guide to tax and financial planning.

Making the most of your finances

For information and tips designed to help you make the most of your finances, visit the Your Money section of our website.


In the News

HMRC proposes to move more VAT filing online
HM Revenue and Customs has launched a consultation on the next steps for moving VAT online.

Government closes capital allowances loophole
The Government has brought forward the closure of a loophole which allowed businesses to accelerate capital allowances claims for plant and machinery and obtain advantageous early tax relief.

Chancellor confirms 50p tax rate 'under review'
The Chancellor George Osborne has confirmed that HMRC is reviewing the 50% top rate of income tax, fuelling speculation that the rate will be scrapped next year.

Intellectual property laws to be overhauled
The Government has unveiled plans to overhaul the UK’s intellectual property laws in a bid to boost economic growth.

Junior ISA limit is raised to Ł3,600
The annual amount that can be invested into a new Junior Individual Savings Account (JISA) has increased from £3,000 to £3,600.