With the government said to be desperately seeking “cost-free” ways of lifting growth that do not threaten the deficit and debt reduction plan, the Prime Minister revealed during a speech to the Institute of Directors that he has instructed the Treasury to consider using state guarantees “to boost credit for business, housing and infrastructure”.

The idea of using state guarantees to boost credit for business, housing and infrastructure would see private sector borrowing wrapped with state insurance, so that companies would be able to raise funds more cheaply to invest in projects that might otherwise have been uneconomic.

The Treasury have already used such a policy for its credit-easing plan to boost lending to small businesses and a Treasury source has said there was no reason why more taxpayer money could not be used on such schemes as the “contingent liability” only becomes a debt if the guarantee is ever called in.

During his speech, the Prime Minister described guarantees as a way of using “the hard-won credibility of the Government’s balance sheet to help the economy grow without adding even further to our debt”.

With the pilot scheme only incorporating a small handful of businesses, the vast majority of companies throughout the UK will still be using the traditional PAYE submission methods. However, with the next year, HMRC are hoping to introduce the system to all businesses; and Maggie Anderson from HMRC’s RTI programme recently gave a speech about the programme and how it will improve the operation of PAYE.

During the speech, Maggie Anderson advised that with RTI, PAYE submissions will have to be made to HMRC when employees are paid, instead out at year-end; and as such it is hoped that by having regular reports about payroll and employee changes, HMRC will be receiving more accurate data, helping to prevent errors from occurring.

The data sent will also be used to help implement universal credits that should come into force in October 2013, and may mean the end of P45 and P46 forms and the dreaded year-end process.

However, whilst the data will be sent on a more frequent basis, Maggie Anderson warned that checks carried out by HMRC will be far more rigorous than the current year-end checks, and if there are any anomalies then the online submission will fail.

She added that the online submission procedure has to be carried out when employees are paid, and for HMRC to accept the data, it must include a number of elements, including the company PAYE reference, the tax office number, employee name, address, National Insurance number, tax code and payroll code.

It is therefore advisable for businesses to ensure that their systems are aligned to minimise the risks of mistakes being made when transferring information from one system to another.

If you’d like more information about what the introduction of RTI will mean for your business, or more advice on preparing for the introduction of RTI, why not speak to your accountant today.

John Kinsella specialises in providing help and advice on PAYE, corporate, personal and capital tax

Early last year the European Court of Justice ruled, following a legal challenge, that gender pricing for insurance products will be banned from the middle of December this year.

The decision by the ECJ is set to affect the way a number of insurers provide price annuities, life insurance, income protection and critical illness cover. It is also expected to influence pension providers with many who currently offer customers varying guarantee periods of annuity quotes, considering slashing them well ahead of the December cut-off point.

One insurance provide, has said: “A gender-specific guarantee period cannot go beyond December 21 so providers have two options. One is to introduce gender-neutral prices early and the other is to reduce guarantee periods.

“We are looking at our options and discussing with distributors the best way to deal with this problem.

“We want to offer customers the best rates we can and the most obvious way to do that is to defer introducing unisex rates to as late as we can.”

Chris Padgett, specialises in working with companies in the insurance sector regulated by the Financial Services Authority and owner-managed businesses.

The State of Retirement Report which questioned 1559 UK adults over the age of fifty, has found that roughly 6.25 million people aged over fifty will rely solely on the state pension when the retire, because they have not saved.

At present 1.2 million people live solely on the state pension, with the average state pension currently being £9,672 a year when additional benefit income such as the additional state pension and the pensions credit is taken into account.

However, these figures are said to be well below the current minimum wage, and even if the government push ahead with plans to introduce a universal flat-rate state pension, which would be a weekly payment of roughly £140, the total state pension is said to still be under the minimum wage level.

A spokesperson behind the report, has said: “It is worrying that so many people are saving little or nothing for their retirement ‘wages’, instead expecting to fall back on the state pension.

“While working hard up to their retirement to bring home a decent wage, I’m sure many will be disappointed to retire with an income equivalent of less than the minimum wage.

“If more people reflected on their pension as a ‘wage’ that they will potentially be relying on for over two decades, they might feel more inclined to plan ahead.”

Along with finding that around twenty-eight percent of those surveyed plan to rely solely on the state pension during retirement, the report also revealed that fifteen percent c of those already retired, or within five years of retirement, had cut back on long-term saving over the last year. The average decrease was £296 a month or £3,552 a year, which equates to a total of £8.3 billion “lost” in retirement savings in the past year.

Earlier this month it was announced that roughly 3.5 million taxpayers would be in line for a tax rebate – worth an average £379 – due to overpayment of PAYE tax, whilst a further 1.6 million would be requested to make additional payments due to underpayment.

Following the release of the figures, HMRC has come under heavy criticism; however the LITRG chairman, John Andrews, has defended the tax organisation, saying that PAYE “does not and was never intended to collect the right tax in all cases during the year” adding there has always been a need for HMRC to make annual checks.

Mr Andrews, went on to say in his defence of HMRC’s PAYE reconciliation: “The biggest difficulty for the PAYE system is the millions of changes that happen during any year which have to be captured and reflected in the PAYE codes.

“How close the system gets to collecting the right tax depends very much on the quality of data it receives. Error or delay on the part of the employer, pension provider, taxpayer, the DWP or HMRC all compromise accuracy.

“And sometimes the system cannot process changes until some time after they have happened.”

It is hoped that future “errors” in regard to PAYE will be reduced further with the introduction of the Real Time Information (RTI) scheme which is currently being piloted.

The warnings from the ICAEW come following their submission to Eurostat’s consultation on whether International Public Sector Accounting Standards (IPSAS) are suitable across the EU.

Within their submission, the ICAEW claimed that cash accounting – where transactions are recorded only when cash is received or paid out – is still one of the greatest weaknesses of public sector finances.

The organisation also said within their submission to the consultation that currently many EU governments employ relatively few qualified professionals and the regional director of ICAEW Europe, Martin Manuzi, has warned that as a result, attempting to move to any set of international standards could be hugely difficult.

Mr Manuzi, added: “We need financial reform in the public sector. However, many countries in the EU haven’t yet got the capability to implement international public sector accounting standards and must therefore focus on getting the basics right.

“Moving from cash to accruals accounting is a critical first step.

“Education and further development of finance skills within the public sector therefore has to be a priority across the EU.”

As an accountant, Ian Gill offers a range of accounting advice and support to owner-managed businesses, sole traders, partnerships, clubs and associations and charities.

In the last report from the Bank of England, the central bank forecast that GDP growth for the UK would be around 1.2 percent for this year and 2.8 percent for the following year; whilst inflation was predicted to hit its 2 percent target in the final quarter of 2012 and fall as low as 1.5 percent in 2013.

However, ahead of the report which will be unveiled later today, it is widely expected that Sir Mervyn King will cut the Bank of England’s forecast for the UK economic growth to 0.75 percent during 2012, with one economist saying: “The economy hasn’t grown for six months, and the headline second quarter GDP data are unlikely to stray much above zero, even if the underlying picture is more robust.”

Along with cutting the forecast for GDP growth, the Bank of England are also expected to stick by their earlier expectations that inflation will fall to its target by the end of the year, despite inflation not falling as expected and the consumer price index rising to 3.5 percent in March.

Despite the figures are expected to paint a gloomy picture for the remaining months of the year, many economists are predicting that the downward revisions for next year will not be much lower than the 2.8 forecast in the last report.

The US and international standard setters were due to finalise a joint overhaul of their rules by June last year, partly to ease concerns posed by the financial crisis. However, the International Accounting Standards Board – who set the IFRS – and the Financial Accounting Standards Board – which sets the Generally Accepted Accounting Principles used by US companies – have shifted their deadline to mid-2013.

It is understood the delay in the accounting reforms come amid expectations the US will disappoint evangelists for a global accounting language, by making at best, a limited commitment to adopting the International Financial Reporting Standards, followed by EU countries, Brazil, Australia, Russia and their neighbours, Canada.

Supporters of a global accounting language believe that it would benefit investors and regulators, as it would improve comparability, whilst also streamlining operations and cutting the cost of capital for companies.

Aligning US GAAP and IFRS would be a huge step in reaching a global language, but IASB and FASB standard-setters have been unable to eradicate some significant differences between the two systems; with many believing the boards could have overhauled their rules quicker, had they been acting individually.

As an accountant, Mark Wilcock specialises in offering accounting and audit advice.

The warning, which comes from the Pension Corporation comes as the pension deficit continues to rise, with the research suggesting that as much as thirteen percent of a companies’ total £750 billion of cash balances will be required to prevent deficits rising further – which will take money away from vital investment such as jobs and growth.

The additional money is required to ease the deficits, despite businesses already contributing £80 billion of deficit reduction payments over the last three years.

Along with warning businesses that extra finances are required to stop soaring pension deficits, British businesses have also been advised that more final salary pension schemes could be forced to close, with the research saying: “UK plc has been swimming hard upstream, with lots of effort being expended, but not making any real progress against the powerful deficit current.

“Trustees with open schemes remain fearful that even these will be closed to future accrual because of the ever increasing burden placed on companies.”

Four years ago, forty-three percent of final salary schemes were open to new members, and only twelve percent were closed to future accrual. However, today only sixteen percent of final salary pension schemes in the private sector remain open to new members, whilst twenty-four percent have been closed to future accrual for existing members.

A recent report which has looked at business finances, suggests that over half of all UK businesses, could be eligible to unclaimed capital allowances on commercial properties – with the report adding up to ninety percent of SMEs could benefit.

According to the report, there is an estimated £70 billion of unclaimed taxes within the UK’s commercial property stock; which is available in rebates to UK businesses who have incurred capital expenditure by buying, building or making adjustments to commercial property; with businesses being eligible to as much as £25,000 each in capital allowance rebates.

Those who could be eligible for a capital tax rebate, according to the report include businesses who own a commercial property and businesses who have purchased lighting systems, heating appliances such as air conditioning, security systems or plant and machinery equipment could also be eligible for a tax rebate.

During the study, which produced the findings for the report, it was suggested that the reason so many businesses could be eligible for a capital allowance tax rebate is due to many accountants being unable to uncover capital allowances; adding: “capital allowances are one of the more obscure areas of tax and for this reason they often pass under the radar of a lot of firms.

“For obvious reasons, HMRC isn’t shouting about it from the rooftops either.

“A big problem is that many accountants are embarrassed to approach their clients about the issue, as really this is something they should have alerted them to years back.”

However, the report adds: “The truth, though, is that accountants can’t be expected to have the skill-set required to identify capital allowances.

“The bottom line is that it’s a very tough climate for the majority of UK firms right now and a cheque from the Inland Revenue would be a real fillip.”