Out of recession - I don't think so.............

January saw us mark the end of the recession – the longest economic downturn on record.

Whilst our Government will surely be patting itself on the back and thanking their lucky stars that we stayed out of depression, I and many others will have little faith in this news. We would be wise to remember that during this recession we have seen the economy reduced by over 6 percent and unemployment rise to 7.8 percent.

I do believe that this may be a temporary step forward. We have to remember that the figures used are for the last financial quarter which includes increased employment of temporary Christmas staff, increased purchases of luxury goods before the VAT rise took effect, the car scrapage scheme coming to an end and people spending slightly more in order to enjoy the festive season.

In April we may well see a step backwards as we see taxes rise as income tax and national insurance rise. As inflation rears its ugly head we may also see an increase in interest rates.

As I write I can see little is being done to stimulate the economy for growth and I do not see a sustainable economic strategy. We are unprepared to take full advantage of the small GDP figures and should not confuse the end of a recession with a start of growth.

We are a long way from seeing real evidence of our recovery and ordinary folk will see little evidence of the end of the recession in their everyday lives.

Those MPs and Their Expenses Claims

Wow what a week or so it has been for our elected Members of Parliament!

As expressed by many living in the real world, the expenses situation is out of control and needs drastic action to take place immediately.

As the Director of a small business, I cannot see how the present system has been allowed to exist as there are clear and concise rules as to what can be legally claimed in expenses. The system is somewhat complex and dealing with it can take a lot of effort. Myself and all my employees know that no expenses will be paid unless receipts and a full justification is present – I have no choice but to make sure everything is in perfect order as if not, as the Company Director, I could end up in prison for tax fraud.

All our salaries are liable for income tax and the existing rules clearly define that we can only be reimbursed for genuine expenses incurred when carrying out our contracted jobs i.e. travelling expenses, hotel costs when working away from home and so on. These expenses do not have a net income and therefore they cannot be taxed. You cannot claim travel between your home and your regular place of work i.e. your commute and personal vehicle use is regulated and limited to 40 pence per mile and claiming for anything above this is illegal under the tax office rules. Any provision of goods deemed to be beyond what is reasonably needed for your actual work falls into the category of “payment in kind” and therefore becomes taxable. May I suggest that the Inland Revenue make arrangements as quickly as possible to investigate underpayment of tax from those Members of Parliament that have flouted these rules.

Whilst many of the items these MPs have claimed for are verging on the ridiculous, I suspect it is the rules that are at fault and not necessarily all of the claimants. They just took advantage of the situation and therefore their ethical and moral judgements must be questioned.

Unfortunately, it is clear that if the expenses policies had not been created by the MPs themselves, many of them would not be in the chaos that they are now.