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Economic News - 11/03/2009 to 17/03/2009

London, UK (20/03/2009)

LONDON (Legal and General Wealth Management) A round up of the week's economic news

• Latest UK unemployment figures show the total number of people jobless has risen to 2.03 million, the highest level since 1997.

• Factory output in Germany fell by 7.5% in January, the biggest fall since reunification in 1990.

• The Nikkei index rose significantly following the Japanese government’s pledge to outline a new stimulus package by early April.

• Chinese Premier Wen Jiabao has stated that his country is in a position to add to its economic stimulus measures at any time. At the same time he expressed concern over the value of China’s large holdings of US assets; the US in turn has sought to reassure China that these investments are secure.

• Norway’s sovereign wealth fund, responsible for around £240bn of profits from its oil and gas reserves, is to start buying commercial property in late 2009, and “The UK will be one of the first markets we will go into”.

• Switzerland, Austria, Luxembourg, Liechtenstein and Andorra all took steps to reduce bank secrecy rules, ahead of the G20 finance ministers’ meeting.

• Federal Reserve chairman Ben Bernanke expects the US recession to end in 2009.The IMF believes that the recession will last longer in the UK than any other G7 country.

• Latest figures show annual sales in online shopping rose 13% in February. Meanwhile, US retail sales fell 0.1% last month.

New Fuel Advisory Rates

HMRC have issued new advisory fuel rates. The new rates take effect for all journeys undertaken from 1st January 2009. The fuel advisory rates set out the recommended petrol and diesel elements in pence per mile of fuel costs. These can be used as the basis for employee expense claims. This and the change of VAT rate on 1st December 2008 will affect the amount of input tax recovery in respect of mileage claims.

See HMRC website:

Electronic Filing – Warning

From April 2010 HMRC will introduce mandatory filing of VAT returns on line. This will affect all businesses with a turnover greater than £100,000 and all newly registered businesses. In addition payment must also be made electronically too. Consequently, it would be worth preparing clients for these changes now.

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