1st Contact is pleased to provide you with a one-stop point of reference for any newsworthy stories that may coincide with the recession. We will be particularly keen to ensure that we include news stories which pertain to smaller and local companies. Thus far, we believe that media coverage has tended to neglect this essential element that helps to contribute to our economy.
A very loud squabble has been going on between the UK Prime Minister Gordon Brown and France’s President Sarkozy, regarding tax reductions. Sarkozy argues that the reduction to 15% most recently has not helped the British economy to pick up as it had hoped, but rather Britain’s industry has shrunk even more. Even banks are suffering and are more exposed to failure than before. Brown is furious of course with this type of attack, but sadly Sarkozy is backed up by many other European countries such as Holland and Germany.
In April there will be a G20 summit of all the world leaders in London and Prime Minister Brown had hoped to show off his tax relief plan to all of those leaders. But, not all of them are impressed even before the summit and will refuse to be a part of a common pact with Great Britain. Sarkozy claims that Great Britain is simply a shrivelled industrial power which has been brought to its knees by a failing banking system. Overall, he states that British consumption which supplies taxes to the national purse has increasingly lowered rather than rose due to the tax break. And, as his last dig, Sarkozy claims that PM Brown did not confer with his EU counterparts with regards to tax concerns, which is intolerable.
The VAT system has been under fire for quite some time and is not going to be fixed anytime soon. However, in another report just after Christmas, it was reported that this past festive season saw an increase in sales due to the reduction in VAT and the cost of fuel. Inflation was down rather than up as predicted.
Most retailers were very conscientious about passing on the VAT at a reduced rate to their customers. Most, however, were not set up to do so or did not bother. That reluctance on the part of the retailer could result in an overpayment on the tax claims for next season. It should also result in a visit to those stores who are still charging too much VAT by the officers of the HMRC. Even if it is for only a year, the new VAT rate of 15% should have an effect on consumerism.
Regarding the VAT, if it makes a difference between staying open in business and having to close the doors, maybe there was not much hope left at any angle. It is not anyone’s fault for the present condition of the economy. Every country is trying to come up with a rescue plan and the major country’s leaders will be heading to the G20 summit in London in April. At this great coming together of leadership and democracy, there will be ideas and hopefully some cohesion among the leaders. It would not be fitting for any one country to be under fire from the rest. If the economy lasts over a year in this current shape, then maybe we need a cleansing and a purification of all that is wrong with it.
We do hope you have enjoyed the contents of this article. Do check this site on a regular basis for updates as and when they occur. In the meantime, should you require any advice and support during this current recession, please get in touch with us here at 1st Contact.
1st Contact Tax offers specialist tax services to contracting professionals.
These services include: Contractor Accounting, Contractor Umbrella payroll, Personal Tax for Contractors, Limited Companies for Contractors and Contractor Financial Advice.