Speaking to the House of Commons, Austin Mitchell MP declared a need to stop consultancy and IT suppliers targeting the public purse as a source of easy profits.

He explained that, since 1997, such consultancies have “grown fat” off the taxpayer, partly thanks to “impulsive gestures” and “idealistic” thinking by the government.

But the member of the Public Accounts Committee said the other cause was state officials being taken in too easily by the IT sector’s sales and marketing teams.

“All too often, departments seem incapable of dealing with the wily stratagems and sales patter of consultancy salesmen,” the Labour MP for Grimsby said last week.

These salesmen, particularly those at the big IT consultancies, “over-praise” their product or service and “forecast that it can do more than it actually can,” he said.

It is not the first attack on IT’s drive for business by a Labour MP. Targeting EDS for its C-Nomis project, Jack Straw said officials were victim to “snake oil salesmen.”

But Mitchell believes the “failure” is actually on both sides of the contract – on the part of the IT supplier’s sales team and the government body engaging that supplier.

He said: “Departments…try to set too many objectives to be accomplished, which always leads to failure in IT contracts. When we try to do more with an IT system than it can bear, it inevitably breaks down and performs inadequately.”

To evidence his claim, he pointed out that the MoD’s defence information infrastructure programme was running 18 months late, and that the NHS care records system was also behind schedule, by four years.

He believes government departments need better advice to “put them on a more secure and effective platform for controlling the suppliers of IT systems they deal with.”

He added: “No taxpayer pound should be the source of easy profit. That is an absolute maxim. However, in consultancy and IT services, the taxpayer pound has been a source of far-too-easy profits.

“We need to control that, exact penalties where necessary and blacklist firms that are over-selling in that fashion to see that they do not make the same profits and mistakes in future.”

Part of Mitchell’s vision includes giving the Office of Government Commerce a stronger and more effective role than that of an advice service, allowing it to push its choices for IT contracts.

“It should have an audit and control role over those contracts, and it should ensure that performance is adequate,” he said. “If it is not, it should demand sanctions and penalties.”

Contractor UK

How does the new allowance work?
ISA’s come in many shapes and sizes; there are cash deposit based accounts or those that invest in a myriad of different assets including stocks and shares, corporate bonds, government debt and property.

You are currently free to invest up to £7200 pa across both ISA types which includes a maximum £3600 in cash but with the new annual subscription limit, over 50’s will soon be able to invest £5,100 in cash and up to £10,200 overall.

Clients need to be aware that you are allowed to open only one cash ISA and one stocks and shares ISA each tax year so if you haven’t already opened one then you can invest up to the new limit. If you have an existing ISA then you may need to take care not to disrupt your existing investment. Some cash ISA providers limit the amount that you can invest in your ISA in a given period of time and if you have already reached that limit then they may not now allow you to take advantage of the new allowance. Some institutions may also decide not to allow their investors the opportunity to benefit from the increased allowance at all but if either scenario applies to you all is not lost.

It is possible to transfer your ISA to another provider to take advantage of the increase, but it is vital that you do not simply close your existing ISA account to open another. Simply closing an existing account without formally transferring your balance in the old ISA will mean that the existing funds are looked on as new money and reinvestment will be counted against your allowance for this year.

This means that if, for example, you have built up a substantial savings pot in your exiting cash ISA of what could be as much as £30,000 and then close this account trying to re-invest in a new cash ISA, you will only be able to receive the tax benefits on £5100 of this money. Instead, you must transfer the balance using an ISA transfer form so that any pre-existing investment remains protected by the tax wrapper.

It is also important to check the terms and conditions that your ISA provider is offering on investment up to the new limit. It may be that a different rate or charges apply to investments over the existing limit of £7,200 and up to the new £10,200 limit and you should be especially wary of this if you have a fixed rate ISA.

How can I best take advantage of the increased allowance?
It’s all about risk versus reward. The cash ISA option carries less risk than a stocks and shares ISA but interest rates on deposits are currently low whilst equities have bounced back very strongly of late.

If you are tempted to invest in stocks and shares but you are put off by the risk then you could consider drip feeding money into your ISA to spread the risk. This is advisable for any form of investment but is especially useful for Stocks and Shares ISA savers as it allows you to minimise the effects of short term fluctuations in the stock market.

The advisers at RedegoFinancials can help you to maximise your investment potential by advising you on the best ISA for your needs. If you decide to opt for a stocks and shares ISA then our adviser will recommend a suitable spread of stocks and shares to suit your attitude to risk and they are on hand to help you transfer your ISA if your current provider won’t allow you to take advantage of the new limit.

Contractor Financials

Dave Hartnett, HM Revenue & Customs’ Permanent Secretary for Tax, appears in a hard-hitting two-minute video warning that people “fiddling” their taxes could face jail.

It is the first time that HMRC has used social media to communicate with the public. Previously it has run television campaigns to encourage people to file their tax returns on time and to collect their tax credits.

A spokesman said: “We are looking to use social media, alongside more traditional communications to reach as wide an audience as possible. YouTube is clearly a popular platform for brief, to-the-point communications and that is why we have decided to post the video there.”

Mr Hartnett, who masterminded this crackdown on offshore savers, said that his message was “blunt”. “For some people, offshore bank accounts and tax havens typically conjure up images of exotic and faraway places, well out of the reach of the taxman at home,” he said.

“Well, life’s just not like that any more. And here’s a blunt message from HM Revenue and Customs: times have changed. The taxman now has more powers and more information … If you evade tax on your offshore assets, you’ll be found out and you could be prosecuted.”

He urged savers to take advantage of HMRC’s tax amnesty launched in July this year, which limits the penalties for those who come forward to notify the Revenue before November 30 that they have offshore interests.

Under the terms of the New Disclosure Opportunity (NDO), those who declare that they have savings or other income from overseas, for example from renting out property, will pay all the tax they owe plus a 10 per cent penalty.

Savers who notify HMRC by phone or in writing must pay the tax and penalty by January 31. Those who alert the Revenue online have until March next year to settle their bill. Those who fail to come forward face penalties of up to 100 per cent of the tax they owe and could face prosecution.

This is the second such amnesty that has been offered by the taxman, but HMRC says that it will be the last.

The initial disclosure regime, which closed in 2007, raised £400 million for the Treasury coffers after 45,000 savers came forward.

At that time, HMRC had obtained details of all Britons holding money offshore from five leading banks. Since then HMRC has collected information on thousands more British savers from hundreds of smaller banks. Accountants say that the taxman could have details of as many as 100,000 people. HMRC would not reveal how many people had come forward under the NDO, but it said that it expected a flood of disclosures ahead of the November deadline.

A spokesman said: “We do not expect to have a full picture of the amount of tax, interest and penalties recovered until the deadline for payment has passed in March 2010.”

Appealing to savers’ consciences, the video points out that “by fiddling your tax, you’re robbing public services of much-needed funding”. In a line reminiscent of a gangster movie, Mr Hartnett adds that the possibility of jail for those who do not declare their income “is not a hollow threat”.

Accountants say that HMRC has become more hardline about chasing tax payments as the income from tax has dwindled during the recession. Angela Beech, tax partner at Blick Rothenberg, the accountant, said: “The Revenue are getting more threatening as they have a huge black hole to fill because of plummeting tax receipts.”

In May it emerged that HMRC would use debt collectors to chase individuals and businesses who have failed to settle their tax bills.

Times Online

Unsurprisingly, young people are the least likely to have made a will, with 88% of people in their 20s failing to write one.

But one in four people in their 60s has also failed to set out who they want their money and belongings to go to, rising to 41% among those aged between 50 and 59.

If people die without making a will their assets are classed as being intestate and are divided up according to set guidelines.

Under these guidelines, married couples automatically inherit only £250,000 of their partner’s estate.

In the past, this has led to a mother having to sue her young children to access money that has been passed on to them when there was no will.

The main reason people gave for not having a will was that they had not got around to writing one yet, cited by 43pc, while 24pc said they had nothing of any value to leave behind.

Around 14pc of people admitted it had never occurred to them to write a will, while 13pc said they could not afford the cost of setting one up and 11pc said they had not yet decided who they wanted to leave money to.

Just under one in 10 people admitted they had not written a will because they did not know how to go about it.

Karen Barrett, chief executive of Unbiased.co.uk, said: ”By having a will in place families can avoid worry and stress at an already difficult time.”

Telegraph Online

If you need help writing a will, please get in touch with Redego Financials

4. DON’T LIE TO HMRC
This is the simplest and most reliable way of avoiding that jail sentence!

New guidance from HM Revenue and Customs now defines tax avoiders as those seeking to pay less tax than “if Parliament turned its mind to the specific issue in question”.

The rules are likely to lead to tens of thousands of people who arrange their financial affairs in perfectly legal ways being investigated by tax inspectors.

Last night, accountants and lawyers described the rules as a “wholly unwarranted extension” of HMRC’s powers which threatened to undermine the democratic right of Parliament to set the law.

The new “code of practice” for tax inspectors was reissued last month without public announcement.

In the key passage defining tax avoidance – and therefore which practices may be pursued – it now states: “Avoidance is not defined in the Taxation Acts…One definition is ‘a situation where less tax is paid than Parliament intended, or more tax would have been paid, if Parliament turned its mind to the specific issue in question’. At a practical level the problem is then essentially one of deciding what Parliament would have intended and identifying who should be asked to decide this.”

“Inspectors need to have in simple terms a working concept of ‘avoidance’ in order to properly identify cases which can be worked…The starting point should be that one would normally expect taxpayers to pay tax on their income or profits…It is reasonable to assume that where a commercial transaction is carried out in a particularly convoluted way, then avoidance is afoot.”

It is understood that leading accountants and tax lawyers have met to discuss the potentially sweeping nature of the new guidance. The legality of the rules may be challenged in court if a taxpayer is pursued for breaking a law which does not yet exist.

HMRC has already faced criticism for applying new tax laws retrospectively. Thousands of families who had established trusts were recently hit by retrospective rules.

Last night, Mike Warburton, an accountant at Grant Thornton, said: “We live in a democracy where the law is supposed to be set by our elected representatives.

“In disputes, the courts are entitled to consider what Parliament intended but it is a wholly unwarranted extension of this principle for HMRC to decide what Parliament would have intended if they had bothered to think about it. It is the start of a slippery slope towards a police state.”

However, a spokesman for HMRC defended the advice. “There has been no change in what HMRC sees as avoidance,” he said. “The updated guidance explicitly states that there is no definition of avoidance but offers a short and simple starting point for staff.”

Telegraph Online