Alternative Finance

Posted in Uncategorized on August 30, 2017 by John

As banks continue to lend less to the small businesses and entrepreneurs of the UK more alternative finance providers are springing up, be that venture capital, crowd sourcing or the exceptional growth of the online ICO or Initial Coin Offerings of the “blockchain” or crypto-currency sector.

I love this “disinter-mediation” of the usual banks and government bodies and so wanted to share several new financiers with any reader, one a  leading Commercial finance provider with a deep pool of investors looking for a reasonable return for funding UK businesses and the other a consultancy specialising in the facilitation and promotion of online ICO fundraising for growing fin tech companies.

Block-Chain.me: A great website backed by a very capable and experienced team, which also serves as a good introduction to the entire Blockchain, Initial Coin Offering, Crypto-currency and the growing economy of the “Internet of Things” (IOT) .

Block-chain.me website capture

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Hive Financial  Hive Financial is a highly experienced commercial finance broker specialising in Commercial, Residential, Bridging and Development Finance, dedicated to giving time and excellence to each case.  “There is no one size fits all. Our loyalty is with you,  Hive Financial have no ties to any particular lender”  – Steven Drake: director. 

hivefincial-hertford.co.uk

 

 

 

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UK – VAT(Value Added Tax) is 40 Today a brief history

Posted in Economics, international tax advice, international tax planning, International Trusts, offshore banking, offshore company formations, offshore trusts, Tax Avoidance on April 1, 2013 by John

Value Added Tax (VAT) is a tax on consumption levied in the United Kingdom by the national government. It was introduced in 1973 and is the third largest source of government revenue after income tax and National Insurance. It is administered and collected by HM Revenue and Customs.

VAT is levied on most goods and services provided by registered businesses in the UK and some goods and services imported from outside the European Union. There are complex regulations for goods and services imported from within the EU. The default VAT rate is the standard rate, 20% since 4 January 2011. Some goods and services are subject to VAT at a reduced rate of 5% (such as domestic fuel) or 0% (such as most food and children’s clothing). Others are exempt from VAT or outside the system altogether. Under EU law, the standard rate of VAT in any EU state cannot be lower than 15%. Each state may have up to two reduced rates of at least 5% for restricted list of goods
and services. The European Council must approve any temporary reduction of VAT in the public interest. VAT is an indirect tax because the tax is paid to the government by the seller (the business) rather than the person who ultimately bears the economic burden of the tax (the consumer). It is also a regressive tax: the poorest people spend a higher proportion of their disposable income on VAT than the richest people.

History Prior to 1973:

The UK had a consumption tax called “Purchase Tax” which was levied at different rates depending on the goods’ luxuriousness. On 1 January 1973 the UK joined the European Economic Community and as a consequence “Purchase Tax” was replaced by “Value Added Tax” on 1 April 1973. The then Conservative Chancellor Lord Barber set a single VAT rate (10%) on most goods and services. In July 1974, Labour Chancellor Denis Healey
reduced the standard rate of VAT from 10% to 8% but introduced a new higher rate of 12.5% for petrol and some luxury goods. In November 1974 Healey doubled the higher rate of VAT to 25%. Healey reduced the higher rate back to 12.5% in April 1976. Conservative Chancellor Geoffrey Howe increased the standard rate of VAT from 8% to 15% and abolished the higher rate in June 1979. The rate remained unchanged until 1991, when Conservative Chancellor Norman Lamont increased it from 15% to 17.5%. The additional revenue was used to pay for a reduction in the hugely unpopular community charge. During the 1992 general election the Conservatives promised not to extend the scope of VAT, but, in March 1993, Lamont announced that domestic fuel and power, which had previously been zero-rated, would have VAT levied at 8% from April 1994 and the full 17.5% from April 1995. The planned introduction of VAT on domestic fuel
and power went ahead in April 1994, but the
increase from 8% to 17.5% in April 1995 was
scuppered in December 1994, after the
government lost the vote in parliament.
In its 1997 general election manifesto, the Labour Party pledged to reduce VAT on
domestic fuel and power to 5%. After gaining power, the new Labour Chancellor
Gordon Brown announced in June 1997 that the lower rate of VAT on domestic fuel and
power would be reduced from 8% to 5% with effect from 1 September 1997. In November 1997, Brown announced that the VAT on installation of energy saving materials would be reduced from 17.5% to 8% from 1 July 1998. Brown subsequently reduced VAT
from 17.5% to 8% on sanitary protection products (from 1 January 2001); children’s
car seats (from 1 April 2001); conversion and renovation of certain residential properties (from 12 May 2001);
contraceptives (from 1 July 2006); and smoking cessation products (from 1 July
2007)

In response to the late-2000s recession, Labour Chancellor Alistair Darling announced in November 2008 that the standard rate of VAT would be reduced from 17.5% to 15% with effect from 1 December 2008. In December 2009, Darling announced that the standard rate of VAT would return to 17.5% with effect from 1 January 2010. In the run up to the 2010 general election there were reports that the Conservatives would raise VAT if they gained power. The party denied the reports. Following the election in May 2010, the Conservatives formed a coalition government with the Liberal Democrats and in June 2010 Conservative Chancellor George Osborne announced that the standard rate of VAT would increase from 17.5% to 20% with effect from 4 January 2011.

Operation:
All businesses that provide “taxable” goods and services and whose taxable turnover exceeds the threshold must register for VAT. The threshold has been £77,000 since April 2012. It is by far the highest VAT registration threshold in the world. Businesses may choose to register even if their turnover is less than that amount. All registered businesses must charge VAT on the full sale price of the goods or services that they provide unless exempted or outside the VAT system. The default VAT rate is the standard rate, currently 20%. Some goods and services are charged lower rates
(reduced or zero). Registered businesses must pay over to HMRC the VAT they have charged on their goods or service (known as output tax) but they may offset this with the VAT they have incurred on goods or services they have purchased (known as input tax).

A separate scheme, called The Flat Rate Scheme is also run by HMRC. This scheme allows a VAT registered business with a turnover of less than £150,000 per annum to pay a fixed percentage of its turnover to HMRC every 3 months. The scheme is designed to reduce red tape for small business and allow new companies to keep some of the VAT they charge to their customers.

Businesses that sell exempt goods or supplies, such as banks, may not register for VAT or reclaim VAT that they have incurred on purchases. Businesses that sell some exempt goods or supplies may not be able to reclaim the VAT on all of their purchases. However, businesses that sell zero-rated goods or supplies, such as food producers or bookseller, may reclaim all the VAT they have incurred on purchases.

Rates:
There are currently three rates of VAT:
standard (20%), reduced (5%) and zero
(0%).In addition some goods and
services are exempt from VAT or outside the
VAT system.[1]
The following are the rates applicable to
some common goods and services:
Standard Rated
Alcoholic
drinks
Biscuits
(chocolate
covered only)
Bottled water
(inc. mineral
water)
Calendars &
diaries
Carbonated
(fizzy) drinks
CDs, DVDs &
tapes
Cereal bars
Chocolate
Clothes &
footwear (not
for children
under 14)
Confectionery/
sweets
Delivery
charges
(postage &
packaging)
Electrical
goods
Electricity,
gas, heating
oil & solid fuel
(business)
Food & drinks
supplied for
consumption
on the
premises (at
restaurants,
cafes etc)
Hot take-away
food & drinks
(inc. burgers,
hot dogs,
toasted
sandwiches)
Ice cream
Fruit juice &
other cold
drinks (not
milk)
Nuts (shelled,
roasted/
salted)
Potato crisps
Prams &
pushchairs
Road fuel
(petrol/diesel)
Salt (non-
culinary)
Stationery
Taxi fares
Tolls for
bridges,
tunnels &
roads
(privately
operated)
Water
(industrial)

Reduced Rated:

Children’s car
seats
Electricity,
gas, heating
oil & solid
fuel
(domestic/
residential/
charity non-
business)
Energy
saving
materials
(permanently
installed in
residential/
charity
premises)
Maternity
pads
Mobility aids
for the
elderly
Sanitary
protection
products
Smoking
cessation
products

Zero Rated:

Aircraft (sale
charter)
Bicycle &
motorcycle
helmets
Biscuits (not
chocolate
covered)
Books, maps
& charts (no
ebooks)
Bread, rolls,
baps & pita
bread
Brochures,
leaflets &
pamphlets
Building
services for
disabled
people
Cakes
(including,
Jaffa Cakes)
Canned &
frozen food
(not ice
cream)
Cereals
Chilled/froze
ready meals,
convenience
foods
Clothes &
footwear (for
children
under 14
only)
Construction
& sale of new
domestic
buildings
Cooking oil
Donated
goods sold a
charity shop
Eggs
Equipment
for disabled
people (inc.
blind/partiall
sighted)
Fish (inc. liv
fish)
Fruit &
vegetables
Live animals
for human
consumptio
Meat &
poultry
Milk, butter,
cheese
Newspapers,
magazines &
journals
Nuts & pulse
(raw for
human
consumptio
Prescription
medicine
Protective
boots &
helmets
(industrial)
Public
transport
fares (bus,
train & tube)
Salt
(culinary)
Sandwiches
(cold)
Sewerage
(domestic &
industrial)
Shipbuilding
(15 tonnes o
over)
Tea, coffee &
cocoa
Transport in
vehicle, boat
or aircraft
(not fewer
than ten
passengers)
Water
(household)

Revenue

VAT revenue since 1978/79 as a percentage
of total government revenue:[27]
Year VAT
(£bn)
% Year VAT
(£bn)
1978/79 4.9 7.02% 1988/89 27.2 13.
1979/80 8.0 9.41% 1989/90 29.6 14.
1980/81 11.1 11.00% 1990/91 30.9 13.
1981/82 11.9 9.95% 1991/92 35.3 15.
1982/83 13.8 10.63% 1992/93 37.2 16.
1983/84 15.3 11.09% 1993/94 39.2 16.
1984/85 18.6 12.59% 1994/95 41.7 16.
1985/86 19.4 12.29% 1995/96 43.1 15.
1986/87 21.3 12.94% 1996/97 46.6 16.
1987/88 24.2 13.53% 1997/98 50.6 16.
Estimated Avoidance:

Evasion and fraud

The UK government loses billions in revenue each year due to VAT avoidance, evasion and fraud. In 2006 the loss was estimated to be between £13bn and £18bn, equivalent to £1 for every £6 of VAT due. The bulk of the lost revenue, about £1 in every £8 of VAT due, is due to evasion.[29] Evasion, which is illegal, occurs when registered businesses pay over to HMRC less than they should. This can be done by understating sales or overstating purchases. Evasion also occurs when businesses do not charge VAT on goods and services they provide even though they are legally obliged to. Cash-in-hand jobs by tradesmen may indicate VAT evasion.

In recent years carousel fraud (also known as missing trader fraud) has increased. Criminal gangs trade goods, such as mobile phones, across EU countries. They do not have to pay VAT, as imports from the EU are exempt. The fraud occurs when the criminals sell the goods with VAT in the UK but fail to pass the VAT to HMRC. The goods are often repeatedly shipped round EU countries by criminal gang networks, hence the “carousel” name. According to the HMRC, between £1.1bn and £1.9bn tax revenue was lost in 2004/05 due to carousel fraud.

The European Union Emission Trading Scheme has been plagued by carousel fraud. A loophole in VAT law – the Low Value Consignment Relief (LVCR) – means that goods imported from outside the EU and costing less than a set amount are not subject to VAT. When the LVCR was introduced in 1983 it was set at about £5 but gradually rose to £18. In March 2011 the government announced that the LVCR would reduce from £18 to £15 from 1November 2011.The LVCR has allowed online retailers of DVDs and CDs to avoid VAT by importing the goods from the Channel Islands, which are not part of the EU.
Major retailers involved in this tax avoidance include Amazon, Asda, HMV, Play.com, Tesco, W H Smith and Woolworths. The tax avoided each year due to LVCR was estimated to be £85m in 2005, £110m in 2008, £130m in 2010 and£140m in 2011.
The government has announced plans to close the loophole

Criticism:

Opponents of VAT claim VAT is regressive and is paid by all consumers whether they be rich or poor, young or old The poorest also spend a higher proportion of their disposable income on VAT than richest.

An Office for National Statistics report showed that in 2009/10 the poorest 20% spent 8.7% of their gross income on VAT whereas the richest 20% spent only 4.0% of their gross income on VAT. Similarly, the poorest 20% spent 9.7% of their disposable income on VAT whereas the richest 20% spent only 5.2% of their disposable income on VAT. Supporters of VAT claim VAT is progressive as consumers who spend more pay more VAT. The zero rating of food and allowing businesses to reclaim input VAT means that the government in effect subsidises the food industry. Critics also argue that VAT is double taxation as consumers pay for goods and services using income that has already
been taxed. It is also argued that VAT is an inefficient tax due to the numerous
exemptions and concessions.
It could also be argued that, compared to its predecessor Purchase Tax, VAT has encouraged the “throwaway society”.Purchase Tax imposed high rates on
new goods (especially luxury goods) but did not apply to repair services.VAT has
increased the cost of repairs and encouraged consumers to replace goods rather than
have them repaired.VAT also covers second- hand goods (which Purchase Tax did not)
and has discouraged the re-use of goods through the second-hand market

Wiki Leaks show the US already had new pope on the radar at last conclave

Posted in Big Brother, Electronic surveillance on March 13, 2013 by John

http://cablegatesearch.net/cable.php?id=05VATICAN466&q=bergoglio

A roll call of corporate rogues who are milking the UK

Posted in Economics, international tax planning, offshore banking, offshore tax planning, Tax Avoidance, Tax Planning, Uncategorized on January 24, 2013 by John

The scale of unpaid tax now outstrips the entire deficit. Forcing the elite to pay up is a matter of both justice and necessity

Writes

in The Guardian

Starbucks TUC protest Oxford Street

Police officers protect a Starbucks outlet in Oxford Street during the TUC anti-austerity protest in London on 20 October 2012. Photograph: Suzanne Plunkett/Reuters

‘Only the little people pay taxes,” the late American corporate tax evader Leona Helmsley famously declared. That’s certainly the spirit of David Cameron and George Osborne’s Britain. Five years into the crisis, the British economy has just edged out of its third downturn, but construction is still reeling from government cuts and most people’s living standards are falling.

Those at the sharp end are being hit hardest: from cuts to disability and housing benefits, tax credits and the educational maintenance allowance and now increases in council tax while NHS waiting lists are lengthening, food banks are mushrooming across the country and charities report sharp increases in the number of children going hungry. All this to pay for the collapse in corporate investment and tax revenues triggered by the greatest crash since the 30s.

At the other end of the spectrum though, things are going swimmingly. The richest 1,000 people in Britain have seen their wealth increase by £155bn since the crisis began – more than enough to pay off the whole government deficit of £119bn at a stroke. Anyone earning over £1m a year can look forward to a £42,000 tax cut in the spring, while firms have been rewarded with a 2% cut in corporation tax to 24%.

Not that many of them pay anything like that, even now. The scale of tax avoidance by high-street brand multinationals has now become clear, in no small part thanks to campaigning groups such as UK Uncut. Asda, Google, Apple, eBay, Ikea, Starbucks, Vodafone: all pay minimal tax on massive UK revenues, mostly by diverting profits earned in Britain to their parent companies, or lower tax jurisdictions via royalty and service payments or transfer pricing.

Four US companies – Amazon, Facebook, Google and Starbucks – have paid just £30m tax on sales of £3.1bn over the last four years, according to a Guardian analysis. Apple is estimated to have avoided over £550m in tax on more than £2bn worth of underlying profits in Britain by channelling business through Ireland, according to a Sunday Times analysis, while Starbucks has paid no corporation tax in Britain for the last three years.

The Tory MP and tax lawyer Charlie Elphicke estimates 19 US-owned multinationals are paying an effective tax rate of 3% on British profits, instead of the standard rate of 26%. It’s all entirely legal, of course. But taken together with the multiple individual tax scams of the elite, this roll call of corporate infamy has become an intolerable scandal, when taxes are rising and jobs, benefits and pay being cut for the majority.

Not only that, but collecting the taxes that these companies have wriggled out of would go a long way to shrinking the deficit for which working- and middle-class Britain’s living standards are being sacrificed. The total tax gap between what’s owed and collected has been estimated by Richard Murphy of Tax Research UK at £120bn a year: £25bn in legal tax avoidance, £70bn in fraudulent tax evasion and £25bn in late payments.

Revenue and Customs’ own last guess of £35bn has been widely recognised as a serious underestimate. But even allowing for the fact that it would never be possible to close the entire gap, those figures give a sense of what resources could be mobilised with a determined crackdown. Set them, for instance, against the £83bn in cuts planned for this parliament (including £18bn in welfare) – or the £1.2bn estimated annual benefit fraud bill – and you get a sense of what’s at stake.

Cameron and Osborne wring their hands at the “moral repugnance” of “aggressive avoidance”, but are doing nothing serious about it whatever. They’ve been toying with a general “anti-abuse” principle. But it would only catch a handful of the kind of personal dodges the comedian Jimmy Carr signed up to, not the massive profit-shuffling corporate giants have been dining off.

Meanwhile, ministers are absurdly slashing the tax inspection workforce, and even introducing a new incentive for British multinationals to move their operations inbusiness to overseas tax havens. The scheme would, accountants KPMG have been advising clients, offer an “effective UK tax rate of 5.5%” from 2014 (and cut British tax revenues into the bargain).

It’s not as if there aren’t any number of measures that would plug the loopholes and slash tax avoidance and evasion. They include a general anti-avoidance principle (of the kind the Labour MP Michael Meacher has been pushing in a private member’s bill) that would outlaw any transaction whose primary purpose was avoidance rather than economic; minimum tax (backed even by the Conservative Elphicke); and country-by-country financial reporting, and unitary taxation, to expose transfer pricing and limit profit-siphoning.

The latter would work better with international agreement. But there is already majority support in the European Union, and it is governments in countries such as Britain – where the City is itself a tax haven – that are resisting reform. When you realise how closely the tax avoidance industry is tied up with government and drawing up tax law, that’s perhaps not so surprising.

But when austerity and cuts are sucking demand out of the economy, fuelling poverty and joblessness and actually widening the deficit, the need to step up the pressure for corporations and the wealthy to pay their share as part of a wider recovery strategy couldn’t be more obvious.

The target has to shift from “welfare scroungers” to tax dodgers, and the campaign go national. Companies that are milking the country at the expense of the majority are especially vulnerable to brand damage. Forcing them to pay up is a matter of both social justice and economic necessity.

Twitter: @SeumasMilne

• This article was amended on 31 October 2012. The original said that Apple is estimated to have avoided over £550m in tax on more than £2bn worth of sales. This has been corrected.

Formcos-Russia – The Russian Trust Company

Voters blame banks not over-spending for deficit

Posted in Economics on January 23, 2013 by John

From Liberal Conspiracy A new poll (in the USA)shows that the public blame failures in the banking sector for causing the deficit more than they blame overspending.

45% of respondents said “greed and recklessness amongst bankers on Wall Street and in London” was most responsible for the deficit and growing national debt, with 43% blaming “the failure of governments to properly regulate banks and financial institutions”.

‘Over-spending’ options all received significantly lower scores – 28% blamed “overspending on benefits and immigration”; 19% “overspending on the wars in Iraq and Afghanistan” and just 3% blamed “overspending on schools and hospitals”.

Participants in the poll by Greenberg Quinlan Rosner were asked to pick the top two causes of the deficit and growing debt.

Just 6% placed the blame entirely at the feet of overspending, while more than three times as many (19%) exclusively blamed the failures of the banking sector.

While nearly half the population (44%) saw spending as one of the two main causes of the deficit, more than two thirds (69%) saw banking failures as at least one of the top causes.

Even 2010 Tory voters don’t exclusively blame spending. Just 7% picked only spending options in the poll, while 60% identified banking failures as one of the main causes.

James Morris, Director of GQRR’s European Office, said:

Voters take a broad view of the causes of the deficit. It isn’t enough just to control spending – voters also want to know that politicians are willing to change the culture and practices of the banking sector. The government’s failure to move strongly and rapidly in this area is one reason why their promise of ‘short term pain for long term gain’ has begun to sound hollow.”

This poll also shows why banks face such a struggle to rebuild their reputations. Consumers don’t just see bankers as greedy, they think that greed has directly impacted on their lives and their country. To rebuild trust bankers need to be seen to embrace measures that protect the wider economy. Bankers that becomes the champions of change rather than its enemy are poised to do well.

The survey questioned 3,174 respondents and was weighted to be nationally representative. Fieldwork was conducted 13-16 July 2012.

 

Formcos-Russia – The Russian Trust Company

HMRC is checking taxpayers’ private communications

Posted in Uncategorized on January 17, 2013 by John

The Independent
By NICK HUBER

HMRC is checking taxpayers’ private communications

14 January 2013

Records of taxpayers’ emails, text messages and phone calls, as well as websites they have visited, are increasingly being examined covertly by HMRC investigators. Data obtained under a Freedom of Information Act request (FOIA) shows that HMRC inspectors obtained 14,000 records of taxpayers’ communications data in 2011 ‒ up from 11,500
in 2010. The records concerned show, for example, the date, time, sender and recipient of an email or phone message, or the date, time and address of a website visited.

The information can be obtained under the Regulation of Investigatory Powers Act 2000 (RIPA), which allows HMRC to authorise its own surveillance requests. It does not have to have suspicions of criminal activity and no warrant is needed.

The actual content of emails and phone messages are not available directly through RIPA requests, but can be obtained by a later request if the communications data raises suspicion of wrongdoing. HMRC did not disclose how many full interception warrants it has obtained.

HMRC can also self-authorise directed surveillance operations under which a taxpayer can be followed in public places. Its response to the FOIA request showed that this type of surveillance has
declined slightly as electronic interceptions have been favoured instead. HMRC refused to reveal the number of successful prosecutions for tax evasion resulting from RIPA surveillance. But it says its use of the RIPA to obtain communications data is ‘proportionate and lawful’ and in 2011 enabled the agency to protect GBP850 million of tax revenue.

Formcos-Russia International Asset Protection

Simply Why The UK Is Still In Reccession

Posted in Economics on January 16, 2013 by John

From Tax Reseach UK

The Guardian has reported that Eurozone car sales were down 16% in December.
Now that is possibly because there were two fewer trading days, but that seems unlikely.
What seems likely to me is that people are saving.
Economic recovery is dependent upon four things. One is increased consumer spending. Another is increased net business investment. A third is increased net exports. The last is increased government spending. Those are the four variables in the equation.

What is clear is that consumers are not spending here or abroad. That means business is not investing and exports are not rising.

So it’s all down to government spending. And George isn’t playing.
That’s why we’re still in recession. And why we’ll stay that way too, and the deficit won’t clear and the debt will rise. It’s all rather obvious.
As is the solution.

Unless you’re George.