Treasury News

The Commons Public Accounts Committee named the following firms for being able to exploit loopholes in tax laws - a practice which is perfectly legal.

• Deloitte
• Ernst and Young
• KPMG
• PwC

• Politics
• Tax
• Treasury

• The committee warned that HM Revenue & Customs was engaged in a "battle it cannot win" in seeking to stem the losses to the Exchequer from tax avoidance.
• It has far fewer resources than the big four accountancy firms

• They employ almost 9,000 staff and earn £2 billion a year from their tax work in the UK

• Politics
• Tax
• Treasury

The Public Accounts Committee highlighted the way some firms seconded staff to the Treasury to advise on technical issues in the drafting of legislation - only for the individuals concerned to return to advise clients on how to use those laws to avoid tax.

Through their work in advising government on changes to legislation they have a detailed knowledge of UK tax law, and the insight to identify loopholes in new legislation quickly.

We have seen what look like cases of poacher, turned gamekeeper, turned poacher again, whereby individuals who advise government go back to their firms and advise their clients on how they can use those laws to reduce the amount of tax they pay.

• Politics
• Tax
• Treasury

A group of MPs is questioning the relationship between Britain's big four accountancy firms and the Government in what has become an "unhealthy relationship".

The Public Accounts Committee says accountancy firms can use the information from the Treasury to help their clients avoid paying tax. Some companies employ staff who have temporarily worked in Whitehall.

The accusations of insider knowledge come from the Chair of the Public Accounts Committee, Margaret Hodge. She says the practice represents a "ridiculous conflict of interest" which should be banned.

• Politics
• Tax
• Treasury

Help to Buy is a targeted scheme designed to help people who aspire to own a home. By increasing mortgage availability it will support the construction of new homes and help to boost the economy.

All mortgages sold under Help to Buy will have to meet clear criteria that ensure responsible borrowing. Nobody wants to see a return to the bad old days of 125% mortgages.

The intention of Help to Buy is absolutely clear - it is for people who want to own their first home or move to a bigger home, not a second home. We're working with the industry on the details of the scheme to do just that.

• Politics
• George Osborne
• Help to Buy

The Treasury committee has criticised several areas of the Chancellor's Right to Buy plans in a report on his latest Budget.

The intervention in the housing market may not even help first time buyers - the group the Government insists it is keen to support, MPs said.

They also said Mr Osborne's claim that increased demand will boost supply is "unconvincing".

MPs added that they "struggle to see the rationale for the taxpayer to stand behind loans for people wishing to own a second property".

The committee also warned the Government will come under "immense" pressure to extend Help to Buy in three years time, despite its status as "a scheme designed to deal with a supposedly temporary problem".

• Politics
• George Osborne
• Treasury

Help to Buy consists of two elements, an "equity loan" scheme and the mortgage guarantee.

Under the equity loan new or existing homeowners will need to raise a deposit of 5% of the value of the property they want to buy, but can borrow up to a further 20% from the Government on an interest-free basis. The biggest loan available will be £120,000.

The mortgage guarantee element will be available for all types of housing stock worth up to £600,000 from January. The Government will guarantee up to 15% of a mortgage, allowing people with 5% deposits access to lending.

Read: Could the Guarantee make mortgages more expensive?

• Politics
• George Osborne
• Mortgages

George Osborne risks skewing the housing market at a huge cost to the Treasury with plans to boost home ownership through mortgage guarantees, a powerful committee of MPs has warned.

The Treasury committee warned the Chancellor's Help to Buy scheme is "very much work in progress" and may propel the Government as an active player in the market with a financial interest in maintaining house prices.

MPs warned a lenders fee structure the Government intends to put in place to cover the scheme's costs will be "extremely difficult" to price in a way that "sharply curtails Exchequer risk".

Read: What the Budget means for house buyers and mortgages

• Politics
• George Osborne
• Mortgages

Fitch Places #UnitedKingdom on Rating Watch Negative http://t.co/D1g6jtPUyA #UK

From @FitchRatings on Twitter: ( 5:11 pm, Fri 22 Mar 2013)

Fitch has puts the UK on a negative watch - not a downgrade.

It will be a relief for the Treasury at the end of a big week that it is only a watch and not the loss of AAA status yet.

But it does mean that a downgrade from a second agency is now more likely by the end of April. This could be followed by a third downgrade, from Standard and Poor's.

Read more: Political Editor Tom Bradby on why the Budget presents a very gloomy economic outlook

• UK
• Treasury
• Economy

The Budget is the major financial and economic report made each year by the Chancellor of the Exchequer.

The Treasury has produced a video explaining a bit more about the history of this annual event:

It reveals that “budget” comes from the term “bougette” – a wallet in which either documents or money could be kept.

Read more: Budget terminology explained

• Politics
• Treasury
• Budget