When the taxman comes to call

We all know that times are tight, which means that HM Revenue & Customs (HMRC) is receiving lower tax income. Increasing tax revenue has now become high priority with HMRC and a wide number of measures are being used to achieve this.

The taxman wants to get his cheque quickly and a range of measures are now used to identify those who might be evading payment. The internet, third party information and scrutiny of local press reports are used to identify those who might be chancing their arm. Encouragement is given to report any suspicions of tax or benefit fraud online or by telephone.

There have been amnesties directed at particular professions - doctors, dentists, online traders, plumbers, electricians - to get them to come clean, and there have been more widely publicised campaigns for those with offshore income.

Certain trades are being targeted in the UK. Restaurants are particularly popular and a favourite ploy is to turn up at cashing up time and politely request to inspect the premises. Once they are in you cannot get them out!

Remember you don’t have to agree to an inspection unless HMRC holds tribunal approval. You can say it is not convenient and they are welcome to make an appointment to visit. Make sure your staff know this.

However, if you get that letter or visit, don’t bury your head in the sand and hope it will go away. It won’t. It is time to get professional advice and put things in order.

A kick start for bank lending with the new FLS

A new scheme designed to deliver cheap credit to banks in order to boost the economy was launched by the Government and the Bank of England on the 1^st August.

Under the Funding for Lending Scheme (FLS), banks and building societies will be able to borrow funds at cheaper rates than normal, and then lend this money to help businesses and individuals access more credit. Up to £80 billion will be available to institutions over the next 18 months, and the lenders will have to meet lending volume targets in order to take full advantage of the scheme.

Banks will be given the incentive that if they lend more, they will be able to borrow more from the FLS and at further lower cost. Because the Scheme gives lenders greater benefit the more they lend, it is hoped that some of this benefit will now filter through to the business community and to households.

Early indications are that the FLS has already prompted some mortgage lenders to offer cheaper rates on long-term loans.

It is anticipated that another recent Government initiative - the National Loan Guarantee Scheme (NLGS) – is likely to be phased over the coming months, as FLS becomes fully embedded. NLGS  was introduced in March but figures suggest it has failed to achieve the desired increase in lending to businesses.

As with other Government lending schemes, the FLS is available through the major High Street lenders. If you have any questions or would like help approaching a lender for business finance give us a call.