British businesses now owe just over £1.8bn in late corporation tax, up 15% in the past 12 months, according to a new study by online business finance supermarket Funding Options.
Businesses owe £1.8bn in late corporation tax
The firm said smaller businesses were at particular risk of having their assets seized because of volatile cash flows, making it more likely that they fall behind on tax payments. Funding Options' boss Conrad Ford said: "These figures demonstrate the growing pressure on cashflow for companies, which could get worse following the outcome of the EU referendum. Businesses need to have adequate funding to pay tax bills on time."
Reported in: The Scotsman, Accountancy Age
HMRC avoidance crackdown leads to income tax rout
HMRC's tough new stance on tax avoidance has resulted in £400m of extra income tax receipts this year, according to new figures released by the Government after a freedom of information request, with HMRC's Counter Avoidance Directorate also collecting £886m from pinning down avoidance schemes, an 80% rise on the £494m taken during the previous 2014-15 financial year.
Reported in: The Daily Telegraph
Stamp duty boosts tax receipts
New figures show that £7.7bn has been raised from stamp duty land tax (SDLT) during the first eight months of the 2016-17 financial year, despite a 10% drop in the number of homes being sold. The receipts are 12% higher than for the same period the year before.
Reported in: BBC News, The Times
Companies shrug off Brexit vote
A survey from Amazon and Enterprise Nation has found that SMEs are expecting a positive year in 2017 as they become more optimistic about profit and revenue growth. According to the report, businesses are predicting that profits will rise modestly, by 1.1%, up from 0.2% previously. Companies in the east and southeast of England and in the West Midlands are forecasting the highest revenue growth, while by sector financial services, professional services and IT and telecoms are the most optimistic. The research also found that 80% of firms said a global recession was among the biggest risks, with 77% worried about inflation, 72% concerned about a fall in domestic demand and 67% uneasy about eurozone instability.
Reported in: The Times
SMEs uncertain on loan guarantees
A study by fixed-term loan firm Wirefund shows that 55% of SMEs do not understand the personal guarantees that they sign when taking out loans from high street banks, with 79% saying they are not put off by them when taking out a loan. The report also shows that 61% don’t realise how far-reaching the liabilities are and just 8% realise how inescapable they are. Wirefund co-founder Amit Sankey says SMEs need to be better educated about personal guarantees, while the report says the lack of understanding surrounding personal guarantees means “they are not fit for purpose” and “have passed their use-by date.”
Reported in: The Mail on Sunday
Banks could be forced to break themselves up
The Bank of England has suggested that Britain’s biggest banks could be ordered to break themselves up if another major crisis strikes the economy. In its quarterly bulletin, the Bank said officials want lenders to show how they can recover from a wide range of strains, with solutions proportionate to each type of problem. The industry has also been told to make sure it has early warning signs in place, monitoring its financial health in detail to ensure it implements recovery plans sufficiently early.
Reported in: The Daily Telegraph
Overseas investors less attracted by UK
A survey of 259 international companies has found that a third of respondents think Britain will become a less attractive place to invest in over the next three years, compared with 16% when a comparable survey was last conducted in the spring. Only 29% of firms believe the UK’s attractiveness for investment will improve over the next three years, down from 36%. The Sunday Times says the figures suggest multinationals remain wary about the longer-term impact of the vote to leave the EU.
Reported in: The Sunday Times
Business needs “barrier-free” access to the EU
The CBI has warned that businesses need to enjoy “barrier-free” access to the EU once Brexit negotiations have been completed. The organisation said the country should be free of tariffs with “minimal” non-tariff barriers across all sectors. A report from the CBI stated: “It is clear that, for the UK’s modern, interdependent economy, additional barriers to any sector’s trade will be detrimental to other sectors. A new arrangement with the EU must therefore be open and comprehensive, covering goods and services, tariffs and non-tariff barriers.” In response to the CBI report, a government spokeswoman said: “We agree with the CBI that we want a smooth and orderly exit that works for all sectors of the UK economy. That is why we have been engaging intensively with businesses across the country, building a strong understanding of the challenges and opportunities that Brexit brings.”
Reported in: Financial Times, The Times, BBC News
Factory order books hit two-year high
Manufacturers have experienced a surge in the overall level of orders, according to the CBI industrial trends survey. Its gauge rose to zero in the three months to December, from -3 in November. This was better than the -5 balance expected by economists and the highest level in 20 months. Expectations for output among the 482 manufacturers surveyed fell from 24% to 21%. However, Paul Hollingsworth of Capital Economics said that this remained at a level consistent with quarterly growth in manufacturing of about 1%. The survey indicated that a balance of 19% of manufacturers reported an increase in production over the past three months - the best reading since mid-2014 – while only four of 18 sectors reported a drop in output. However, the pick-up in orders came from stronger domestic demand rather than the effect of a weak pound pushing up the level of exports. The export orders balance declined in December, falling from -11 to -15, which was the lowest level since July.
Reported in: The Times
UK car production hits 12-year high
Figures from the Society of Motor Manufacturers and Traders have showed that Britain built more cars in the first eleven months of 2016 than any full year since 2004. Just over 1.61m cars were made in the year to November, ahead of 2015’s total output of 1.59m units. The rise was helped by a 13% year-on-year rise last month to 169,247 cars.
Reported in: Financial Times, The Times
Levels of financial distress increase in property sector
Over 25,000 property companies in the UK, equivalent to 18.3% of the industry, are in financial distress, according to research from Begbies Traynor, a 6.6% rise on last year. Begbies’ Red Flag Alert predicts that a third of those in distress are unlikely to be trading in three years’ time. Estate agents have been hit particularly hard after transactions slowed, particularly in the capital, due to stamp duty hikes. Julie Palmer, a partner at the firm, said: “Without doubt, 2016 has been a difficult year for the UK real estate industry. Not only did it have to contend with a major slowdown in activity in the run up to the EU Referendum, but over the past 12 months it has also borne the brunt of crippling public policy changes, which have rocked the sector to its foundations.” She added: “However, while levels of financial distress across the sector are much higher than at this stage last year, positive trading in the months following the EU referendum suggests that any potential negative Brexit impact on the housing industry may still be some way off.”
Reported in: The Sunday Telegraph
Biggest builders control land for almost 1m homes
Shelter claims that the UK’s 10 biggest house builders are sitting on 14 years’ worth of land, with the sites potentially able to offer 1m homes. The charity says the companies control 404,000 plots through their current land banks, and a further 558,000 plots in so-called “strategic land banks” – which are not always owned by the house builders but may include ‘Option Agreements’ giving the builder the exclusive right to buy the land from its owner when it becomes available. The Telegraph notes that the figures may open up the firms to criticism over land-banking, highlighting that Communities Secretary Sajid Javid recently claimed that some house builders are “hoarding land rather than prioritising building,” before promising that the upcoming Housing White Paper would set out plans to get more homes built. On Shelter’s findings, its head of housing development Toby Lloyd said: “As the housing crisis continues to bite deeper, the fact that some house builders need to control so much land decades before it is built on exposes the limitations of our current house building system in being able to meet the needs of the country.”
Reported in: The Daily Telegraph
Manufacturing jobs hurt by cheap overseas labour and robots
A rise in the number of jobs going abroad and advances in technology have led to a fall in manufacturing jobs, according to research by UHY Hacker Young. Employment in the sector declined by 12.9% from 101,000 to 88,000, the report says. Paul Daly, partner at the firm, said: "Manufacturing has seen employment numbers fall sharply in the face of international competition and ongoing technological advances. The obvious exception is car manufacturing, which saw a rise in employment numbers and output last year, which bodes well for the industry's future as the UK prepares to leave the EU."
Reported in: The Times
Employers avoid job losses since introduction of living wage
According to a survey by the Resolution Foundation, employers in low-paid sectors have largely managed to avoid job losses since the introduction of the national minimum wage and instead increased prices or tried to improve productivity. The survey suggested that just 2% of companies had made redundancies in response to the measure, though 47% said it had increased their wage bill. Conor D'Arcy, policy analyst at the foundation, commented that employers have responded to the national living wage “by raising productivity, taking a profit hit and raising prices.”
Reported in: The Times
CBI: 2017 will be a jobs bonanza
The CBI has said that “almost every part” of the private sector will hire more staff over the next 12 months. The CBI-Pertemps Network Group Employment Trends Survey found that 41% of companies expect to grow their workforce in 2017, compared with just 13% that expect their payrolls to shrink.
Reported in: The Times, The Daily Telegraph
Corner shop delivery service backed by global giants
Diageo, Coca-Cola, Mars and Heineken are among the consumer groups backing Alchemy Wings, a start-up providing an online delivery service from convenience stores to Londoners living within travel zones one and two. Founder Sam Martin secured £150,000 in seed financing from the groups, which can make around 60% of their profit from convenience stores and are eager to maintain the existing routes to consumers that are being threatened by large retailers such as Tesco and Amazon.
Reported in: The Times
BoE holds rates and signals slower rise in inflation
The Bank of England’s Monetary Policy Committee has kept interest rates unchanged at a record low of 0.25%, and has held its quantitative easing programme at £435bn. The Bank also believes sterling's recent strength will help to limit the rise in inflation next year. November’s projections show policymakers expect inflation to rise to 2.8% in 2017 and 2.7% in 2018.
Reported in: The Daily Telegraph, The Times
First college of coding aims to unlock Britain’s silicon skills
The Times profiles Ada College, England’s first college to specialise in teaching computer coding. Based in Tottenham, north London, it opened in September with an initial group of 58 students, but plans to increase capacity to 2,500 students. At the sixth form, every teenager studies computer science, coupled with A-levels in maths, further maths, graphics or business, with teachers who have hands-on experience in the technology sector and do project work with partners in industry. After completing a BTEC diploma, students will be able to stay on for a foundation degree in digital skills via higher apprenticeships with technology companies, led by Google. Ada also hopes to launch teacher-training courses.
Reported in: The Times
Obama bans oil drilling 'permanently' in millions of acres of ocean
President Barack Obama has permanently banned offshore oil and gas drilling in the "vast majority" of US-owned northern waters. Mr Obama designated areas in the Arctic and Atlantic oceans as "indefinitely off limits" to future leasing. The move is widely seen as an attempt to protect the region before Mr Obama leaves office in January. Reacting to the Arctic declaration, Friends of the Earth said: “No president has ever rescinded a previous president's permanent withdrawal of offshore areas from oil and gas development . . . If Donald Trump tries to reverse President Obama's withdrawals, he will find himself in court.”
Reported in: BBC News