Tag Archive | "tuc"

Do we need more regulation on tax havens?

Mark Field, the Tory MP for the Cities of London and Westminster, has called on the coalition to stop more regulation on tax havens.

Field claims tax havens are an economic benefit and the debate surrounding them is one-sided. The TUC has estimated that HMRC losses £25 billion through corporate tax avoidance; an estimate Field says is way too high.

He went on to explain that Britain has constitutional relationships with 30 financial centres offshore and it is paramount that any new regulations are appropriate. The Crown Dependencies between them provided $332.5 billion net financing to UK banks in the second quarter of 2009 alone.

Tax havens lead the race to attract global capital and in fact a recent report by ActionAid claimed that ninety-eight of the UK’s FTSE 100 companies have set up subsidiaries in tax havens.

The banking sector in particular is a large user of tax havens. Between them, Barclays, HSBC, Lloyds and RBS own 1,649 tax haven companies. Barclays for example has 174 companies based in the Cayman Islands. Jersey has also proved to be a highly popular place to set up a subsidiary.

Meanwhile, the CIoT says all taxpayers should be able to take advantage of initiatives to get their tax affairs in order.

The Institute said schemes offering taxpayers reduced penalties if they own up to previously undeclared tax liabilities should be extended to cover more occupations. So far, disclosure schemes have been offered to medics, plumbers and most recently, tutors and coaches.

John Whiting, the CIoT’s tax policy director, said there’s a lot of benefit to be gained from HMRC’s offshore initiatives, because they encourage people to sort out their tax affairs. But, rather than just allowing certain sectors that opportunity, a cover-all initiative should be open to all.

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Small business taxation still too high says IoD

The Institute of Directors has criticised the coalition for failing to reduce the burden of tax on small businesses. Tax – the Weighty Burden, the annual report from the Institute, calculates that the true burden of taxation for SMEs is between 32% and 43%.

This burden is unlikely to reduce even when corporation tax rates decrease in 2014 because employers have to pay additional fuel duty, national insurance and business rates.

The head of taxation at the IoD, Richard Baron, said the burden of taxation is weighing growth down. Although it is not possible to make radical cuts at the moment, the government should already be making plans to reduce the heavy burden of business taxation.

Baron believes corporation tax needs to be lower than originally planned and employers’ NICs should also be reduced.

However, a recent report from the TUC suggests that cutting corporation tax further would have an adverse effect on the economy and job creation.

George Osborne believes that reducing the rate of corporation tax will entice companies to set up in the UK, which will help drive the recovery in the private sector. But Brendan Barber, the TUC chief, says this argument does not stand up.

The rate of corporation tax in the UK is already amongst the lowest in Europe. The OECD average is 26.5%, but in excess of 90% of small businesses in the UK pay 20% and the average for large organisations is 23.2%.

Barber said that we have extremely competitive corporation tax rates already. He went on to point out that some people, including Osborne, have been talking about emulating the aggressive low tax policies of Ireland, but the current economic problems there suggest that this is not a sensible option.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Scale-A-Week: 14 March 2010 by puuikibeach

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Employers want the employment tribunal system reformed

A new survey conducted by the CIPD has discovered that more than 50% of employers want to see changes in the law so that it is easier for them to sack members of staff.

69% also believe that employers are not protected against unjustifiable employment tribunal claims. 60% said an employee had claimed against them for unfair dismissal and added a claim for discrimination in the hope that they would get more compensation.

The employee relations adviser at the CIPD, Mike Emmott, said that a large number of employers feel the tribunal system has broken down. There have been many attempts to find a solution in recent years but the volume of claims continues to increase.

The survey also found that plans to increase the minimum period employees work before they are allowed to claim unfair dismissal to 2 years is not likely to dramatically reduce the number of claims. Currently an employee can claim unfair dismissal after 12 months. Many of the claims that come before the tribunal are linked to discrimination and that claim can be made as soon as a person starts a job.

An increasing amount of employers are making compromise agreements, whereby they pay compensation in return for the employee not taking the case to a tribunal. The BCC published research earlier this year showing that the average compensation was £5,400 whereas the average tribunal award was £8,500.

The TUC has warned the government over reforming the tribunal system saying any change must make it more effective for the thousands of employees who are wronged at work to receive justice. Employer groups complain about the costs of tribunals but if they treat staff properly, employees would not need to seek redress.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

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Are contractor accountants held back by employment legislation?

Contractor accountants should be aware that the government is planning to overhaul the UK’s employment laws in order to help the economic recovery.

One of the proposals, which has already provoked fury, is to allow firms to fire employees who are underperforming during their first two years of employment, without the threat of facing an unfair dismissal tribunal. Under the current regulations, an employee can seek redress from an employment tribunal if they are sacked after 12 months.

The coalition is also looking into the system of tribunals at present. Business groups, such as the BCC are urging for immediate reform but the TUC suggested that workers could be discouraged from seeking justice if major changes are implemented.

Union leaders are also concerned that increasing the qualifying period to two years could give a green light to unscrupulous employers to break the law.

The coalition is likely to launch a consultation into the future of tribunals after business groups complained that there was a 56% increase in the number of cases in 2010.

One possible solution would be to charge claimants a deposit of up to £500 which would be refunded if the case was successful. But the TUC argues that this will deter low-paid workers from seeking justice.

Meanwhile, Vince Cable, the business secretary, has been asked to look into whether small businesses could be exempted from some employment regulations but any such changes could see the government in hot water from the EU.

David Cameron wants to see new jobs created this year in order to boost the economic recovery and whilst large companies have promised to do exactly that, smaller firms need more encouragement. Reforming the employment tribunal system and reducing the red tape for small businesses could go a long way towards providing it said David Frost from the BCC.

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Don’t spy on your staff, talk to them instead!

Owners of SMEs should talk to their employees about ways of reducing costs rather than spying on them, new research findings suggest.

Iris, a software solutions provider, conducted research which showed that business owners are increasingly scrutinising the timesheets of their employees as well as expense claims and purchasing decisions.

The TUC, however is arguing that this is not the way to reduce overheads and urges managers to talk to their staff about money-saving matters.

TUC policy officer, Paul Sellers, claims that employers who snoop generate resentment which results in lower productivity. Employees can often have good money saving ideas and therefore the best approach would be to involve them in cost cutting exercises, either through the union or a workplace representative.

Meanwhile, big businesses are missing out on potentially large savings by not investing in energy efficiency. The Carbon Trust Advisory claims that companies could save £1.6bn easily by simply upgrading their existing systems and training staff on ways to save energy.

The Trust published a paper earlier this month entitled The Business of Energy Efficiency which showed that finance directors estimate the internal rate of return on energy efficiency investments is less than 20%. In fact the average is actually 48% and investments start to pay back within 3 years.

Hugh Jones, the MD of the Carbon Trust Advisory, said their research showed that large companies are wasting billions every year on unnecessary energy use because they ignore many of the investment opportunities.

Energy efficiency appears to be a low priority in many businesses and a more convincing case needs to be made in order for these organisations to access the capital, resources and expertise required for implementation and staff training.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

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