Taxes

Could public finances be in even worse shape than already suspected? We already know the economy is in a bad way. Biggest peace-time deficit, banks on verge of collapse, triple A rating under threat etc. Now an influential report says the government underestimates the scale of difficulties.

The report claims that additional tax rises or spending cuts of £20bn a year (over and above what we already know about) will be needed within three years. The government is also too optimistic in its economic growth predictions, suggests report author PricewaterhouseCoopers.

The Budget will take place on March 24, in what is expected to be the opening battle in the general election. Today's confirmation of the Budget date suggests the government is planning on May 6 for the election.

The imminent election means this year's Budget is likely to be more of a balancing act than ever. The Labour government is on a rock (the need to prove it is serious about cutting record levels of public borrowing). It is also close to a hard place (the need to woo the electorate and win votes). Neither aim is particularly compatible with the other.

It might sound a little calculating, not to mention downright paradoxical. But if you want to save on your tax bill, consider giving money away. As they say, giving is a form of receiving. Nowhere is this more true than in the UK tax system.

"Making charitable donations through the gift aid system is very tax efficient for both the charity and individuals who are higher rate tax payers," says Jason Butler of Bloomsbury Financial Planning.

Scrimping. Saving. Pinching pennies. Whatever you call it, many of us are doing it. Nearly a third of the population has cut down on everyday luxuries such as eating out, theatre and cinema. A fifth of us are spending less on holidays. The same proportion has switched to cheaper supermarkets.

Amid so much frugality, you might think we would all pay as little tax as possible. Wrong. We are set to waste a collective £9 billion in unnecessary tax payments, reveals a financial website.

Did you think HMRC was a highly-oiled professional machine dedicated to tackling and confronting the world of tax avoidance and its nefarious practitioners?

Some still labour under this idea apparently. The Treasury Select Committee isn't one. It reckons HMRC is badly organized, performs poorly and that its employees suffer from low morale.

All three major parties are now committed to the most economically damaging tax rises - on income and employment - through the 50p income tax rate and the increase in National Insurance Contributions (NICs), tax lobby group Refom has warned.

In its report Reality check: Fixing the UK's tax system, the lobby group lays out why it thinks government and opposition parties have got it wrong and what they should do. It makes for interesting reading.

According to the Electoral Commission just over £5m of donations to the Conservative Party from a firm belonging to Lord Ashcroft were legal.

The decision from the commission comes after a 14-month long investigation and will no doubt be greeted by a sigh of relief at Tory central office.

Taxpayers and companies who deliberately evade taxes face having their name, address and details of their evasion made public from 1 April.

HM Revenue & Customs (HMRC) will be able to publish names and details of individuals and companies who are caught dodging their taxes after enacting legislation yesterday. I like the idea of naming and shaming.

Lord Ashcroft has finally come clean and admitted he is a "non-dom". He's also promised that he will become a full UK resident – if the Tories win the next election.

"Non-doms" normally pay tax on their UK earnings, but not on income from overseas earnings. David Cameron has said all UK peers should be UK resident, and that he would ban non-doms from the Lords.

One million a year is not enough if you're an RBS banker. Royal Bank of Scotland boss Stephen Hester has warned that such an uncompetitive pay package could mean more banker defections in the next 12 months.

Hester claims that banker walk-outs already have cost 84%-state owned RBS £1bn in profits. Plainly Hester wants to retain staff. But he also has to manage much-increased public scrutiny of the way his operation runs.

Will Gordon Brown's new tax code changes for business encourage business to stay put in the UK? Brown has launched a new consultation exercise designed to give multinationals more notice on tax changes.

The issue's a hot button for many Brit-based multinationals craving certainty. Advertising group WPP, drugs producer Shire and drinks maker Diageo have all voiced concern about the need for more tax clarity from Number 10 - but crucially, with more notice.

HMRC continues to crack down on the super-rich. It wants to introduce a new residency rule that will make it harder for 'non-doms' to escape tax. But it seems it's doing pretty well without any new rules.

As Seychelles-based Robert Gaines-Cooper found out. He got a rude shock this week when a UK court ruled that England was still "the centre of gravity of his life and interest", making him liable to cough up £30m in back taxes.

Ministers are considering plans for a 'death tax' raid on the estates of Middle Britain to fund social care for the elderly.

According to reports in the Daily Mail, the government is said to have carried out secret polls to see if voters would stomach a 10% levy on their estates when they die.

Tax fears

The Mail suggests that families of middle income earners with estates worth £500,000 could be hit with a £50,000 extra tax bill when their relatives die, on top of inheritance tax.

In reality it remains unclear whether a levy would be imposed on every estate on death or on those over the £325,000 inheritance tax threshold.

What is in little doubt is that the so-called 'death tax' levy will become an Election issue over the coming weeks and months even if at the moment Labour is only canvassing opinion on it.

More red tape and so-called "supervisory activities" has seen the Financial Services Authority (FSA) sting its members for a 10% membership fee increase.

The FSA's funding needs are rising from £413.9m to £454.7m this year. But the Association of British Insurers (ABI) and the Association of Mortgage Intermediaries (AMI) are howling protest. Both claim they're bearing more than their fair share.