The Treasury has published an internal review of how it handled the 2007/8 financial crisis, admitting its staff were 'stretched' and that it 'did not see the crisis coming'.
Following recommendations from the Public Accounts Committee and the National Audit Office, the 60 page review found that the Treasury was slow in recruiting an adequate number of people to handle the crisis. It also admitted that its high staff turnover must be addressed if a future crisis is to be handled effectively.
Treasury salaries are also some of the lowest in Whitehall, with employees only averaging 32 years of age and a high proportion of those leaving within three years for promotion or higher pay.
"The Treasury, like many other institutions, did not see the crisis coming and was consequently under-resourced when it began," the review said.
"Overall, the Treasury was stretched and could have been better prepared," it added.
The review has been led by Sharon White, former director general at the Ministry of Justice and now head of spending for the Treasury, who will now face difficulties raising wages at a time when the Treasury itself is imposing wage freezes throughout the rest of Whitehall.
The Treasury is part of a tripartite system of regulation which divides responsibility between itself, the Bank of England, and the Financial Services Authority (FSA).
The FSA had undergone a similar internal review process in December and MP's are now calling for the Bank of England to publish a full account of its handling of the crisis. The Treasury report found that relationships between principal levels of regulator management were 'strained.'
The Treasury now aims to improve the 'retention of people with the necessary skills, expertise, and experience.'
Commenting on the review, Sir Nicholas Macpherson, permanent secretary to the Treasury, said: "This report will help the Treasury learn the lessons of its handling of the financial crisis which started five years ago and ensure the department has the right capability to fulfil its duties in relation to financial services in the future."
With the end of the financial year approaching, investors have less than a week to make the most of their annual tax-efficient Individual Savings Account (ISA) allowance.
Currently, savers are able to invest up to £10,680, of which no more than £5,340 can be invested in cash, and receive any income tax free. Alternatively, the full £10,680 ISA annual limit can be invested into a stocks and shares ISA.
The deadline for the current ISA allowance is the end of the financial year on 5 April.
Figures from the Office of National Statistics (ONS) released at the end of February revealed that Britons invested more into stocks and shares ISAs (£15.837 billion) than personal pensions (£14.28 billion) in 2010/11 - the first time investment into ISA's has overtaken personal pensions since 2001/2.
Billy Mackay, marketing director of AJ Bell, said: "These figures show that pension saving had already been falling even before the Government limited the amount that can be saved into a pension from the start of the current tax year."
Economic and political uncertainties were also cited as reasons for the increased popularity of ISAs.
The ISA limit for the 2012/13 tax year beginning on 6 April will increase to £11,280, of which a maximum £5,640 can be invested in cash. The remaining £5,640 can be invested into a stocks and shares ISA with either the same or a different provider.
HM Revenue and Customs (HMRC) has confirmed that it will be going ahead with a major reform of the PAYE system.
The overhaul will involve a switch to a real time information system.
The new system will mean that employers must supply HMRC with details, such as income tax, national insurance contributions and student loan payments, on each payroll day rather than at the end of the year.
HMRC said that the change would bring several benefits. These include making it easier to ensure individuals pay the right tax after a change of job and removing the need for the P45/P46 process over time.
There would be a simplification of the PAYE end of year reconciliation process for employers, and much of the uncertainty that leads to errors in the tax credits system would be lifted.
Following a period of consultation, HMRC said that it is to embark on a pilot scheme in April 2012, involving volunteer employers and software developers.
Work to ensure data quality will begin in October 2011 and continue until all employers have moved to the new system.
Once the pilot scheme has been successfully completed, the plan is that employers will be expected to start using the real time information system from April 2013. It will become mandatory by October 2013.
David Gauke, Exchequer Secretary to the Treasury, said: "Real Time Information will support improvements to the PAYE system making it more accurate for taxpayers and easier for employers and HMRC to administer.
"We need a PAYE system that can meet the demands of the 21st century workplace and ensure that the tax system works better."
Stephen Banyard of HMRC added: "We wanted people who use the system every day to give us their views on the collection of Real Time Information. We have listened to the concerns of payroll providers and employers surrounding the proposed mandation date and amended our plans to take these into account.
"We want to work with software developers and employers to help us deliver the new system. I urge anyone interested in being involved in the pilot to contact us."
This week marks the beginning of the new tax year and some significant changes to the tax system.
Many of the changes have been introduced as a way of helping with the Government's efforts at budget deficit reduction.
Among many changes, one of the biggest differences people will experience is in income tax. As from 6 April, the personal allowance, which marks the point at which income tax becomes payable, rises by £1,000 to £7,475.
However, the threshold at which higher earners become liable for the 40 per cent tax rate falls to £42,475.
The employee national insurance contribution for those who qualify climbs from 11 per cent to 12 per cent.
Anyone who pays NI over the upper earnings limit sees their charge rise by 2 per cent.
A land tax stamp duty rate of 5 per cent is to be charged on residential property transactions worth more than £1 million.
Pension contributions that are entitled to tax relief now have an allowance of £50,000, down from the previous figure of £225,000.
There is no longer a requirement to purchase a pension annuity by the age of 75.
Savers who are willing to keep their money in long-term savings accounts are benefiting from improved interest rates.
According to Moneyfacts, the financial information website, the returns provided by fixed-rate bonds have been on the increase since last summer.
Although that improvement needs to be set in context - the increases have been from a historic low of just 2.25 per cent - it appears to have been prompted by speculation that the Bank of England will be looking to raise official interest rates later this year.
Moneyfacts reported that the average interest rate for a one-year fixed-rate bond is now 2.85 per cent, a high water mark not seen since March 2010.
Two-year bonds hold out the promise of an average 3.42 per cent return. Locking in money for three years rewards savers with an average interest rate of 3.7 per cent, while committing to four years produces an average rate of 4.17 per cent.
Michelle Slade of Moneyfacts said: "The biggest increase in rates is on short-term deals, which are the most popular amongst savers.
"Most of the best deals are from smaller building societies. If savers want to make the most of their money they may need to look further afield than their local High Street.
"The markets expect a rise in Bank base rate in the not too distant future and this is being factored in to the rates being offered to savers."
But Ms Slade advised that people would come face to face with a sizeable penalty charge if they decided they wanted access to their money during the fixed-rate term, and should, therefore, consider carefully whether or not they could afford to tie their savings up for a lengthy period.
The ability of the UK's smaller manufacturers to help re-balance the economy is being put at risk because many are finding it difficult to promote their products in new and emerging markets.
A study by the Forum of Private Business (FPB) found that 26.2 per cent of respondents to the survey cited problems in reaching emerging markets as their top concern, above operations management (18.7 per cent), human resources issues (13.4 per cent) and new product development (12.1 per cent).
As a consequence, many smaller manufacturers consider that they need to amend their business and marketing strategies immediately (28 per cent) or within six months (23 per cent), compared with those willing to delay changes until later in the year (7 per cent) or the longer-term (13 per cent).
However, most firms said that they required more support and guidance when it comes to breaking into new markets.
In all, three-quarters of the smaller manufacturers surveyed think they will need help on sales and marketing in the coming six months, but almost one third (31 per cent) claimed that the necessary advice is not available to them.
Phil Orford, the FPB's chief executive, commented: "Smaller manufacturing businesses should be able to be more flexible than their larger competitors and can move into new and emerging markets more quickly as the economy recovers - but this is not going to happen by itself. Producing a sales and marketing strategy should be a top priority, not an afterthought.
"Customers are highly unlikely to seek out your services under their own steam so it is important that smaller manufacturing firms embrace all of the options that are available to get their message out there."
Elsewhere in the survey, just 20 per cent of firms said they believe 2011 will be easier for their businesses, compared with the 61 per cent who fear it will be even tougher.
However, one in ten are beginning to see an increase in new orders, with one in four saying they expect to do so within six months. Some 36 per cent expect to see a surge in orders in the 'longer term'.
Subsequently, only 6 per cent of respondents are looking to recruit staff at the present time; this contrasts with the 41 per cent that believe they will be creating new jobs only beyond the coming year.
Tax hikes will be needed to sustain the expected levels of future pension payments and benefits, a leading think-tank has said.
According to a report from the National Institute of Economic and Social Research (NIESR), people aged over 65 will get £220,000 more from the state than they would have contributed over the course of their lives.
However, a new born child now will probably pay a net £159,000 more in taxes and contributions than they will receive in return from the state in benefits and services.
The effect will be to create a multi-trillion pound commitment that must be met by future generations.
But closing that tax and pensions gap could cost as much as between £80 billion and £90 billion a year in additional taxes, the NIESR warned.
The estimated shortfall in public funds is primarily driven by pressures on health and pension spending, the NIESR said, rather than by rises in government debt.
So tax increases amounting to 6 per cent GDP may be needed in the future if the country is to avoid a serious diminution in services. That is the equivalent of 16 per cent of total current tax receipts.
The report said: "There is a past history of pay-as-you-go benefits which has allowed earlier generations to receive more from the state than they have contributed over their lifetimes, and it is inevitable that there is now a net contribution which has to be paid.
The Budget must contain the promise of tax cuts if the UK is to escape the perception that it is a high tax economy.
That was the eve-of-Budget message from the Institute of Directors (IoD).
The business organisation argued that the Budget must set out four fundamental changes to the tax system.
It claimed that the proposals involve either little or no cost over the course of the current spending review or more significant cost beyond 2014-15.
The IoD is pushing for an abolition of the top 50 per cent income tax rate, which covers earnings over £150,000 a year, by 2015. While the current economic situation means that dropping the rate immediately would be difficult, signaling its eventual demise would raise business confidence, the IoD said.
Also on the personal tax front, the IoD called for an end to the withdrawal of the personal tax allowance on earnings above £100,000.
To encourage business, the Chancellor should commit the Government to reducing corporation tax to 15 per cent by 2020. This would give the UK the lowest corporate tax rate in the world.
Cutting the corporation tax rate from 24 per cent (to which it is due to fall) to 15 per cent would cost around £9 billion per annum. However, the IoD said, this would be funded by continued restraint in public spending growth and the simplification of certain allowances, together with the impact on GDP growth from greater business investment in the UK.
The fourth area identified by the IoD is an exemption from future capital gains tax for entrepreneurial investments.
Under the IoD proposals, anyone subscribing for shares in a new company starting between now and 5 April 2012 would be exempt from capital gains tax when they sell those shares. This, the IoD added, would encourage the injection of fresh equity capital into businesses.
Miles Templeman, the IoD' s director-general, commented: "Since there is little money in the Treasury's coffers many people are assuming that there's not much George Osborne can do to kick-start economic activity and strengthen the recovery in the Budget. They couldn't be more wrong. Now is the time for the Government to signal in the strongest possible terms its determination to make the UK one of the most tax competitive countries in the world.
"The Chancellor can send this signal by announcing in the Budget that the 50 per cent income tax rate will be abolished by 2014-15, and corporation tax will be reduced to 15 per cent by 2020. This is one of the most dynamic areas of the tax system where deep cuts in rates could transform business behaviour and raise more revenue in the long term.
"This has the potential to boost business confidence and increase inward investment into the UK. We can't afford to make all these tax changes today, but signalling tax cuts for tomorrow could still boost business confidence."