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Business News round up

TAX

Banks plea for 'open for business' tax regime

In its Autumn Statement submission, the British Bankers’ Association has warned that the UK’s current tax system does not suggest the country is “open for business”. Amid continuing uncertainty over Brexit, the BBA said failure to reduce levies on banks could result in the UK “ceasing to be the best place for banking business to be located”. It said taxes such as the bank levy had placed an unfair burden on the sector, increased uncertainty and raised the cost of compliance. The group’s submission also called for clarity on possible “transitional arrangements” with the EU and urged policymakers to fight for passporting rights. It said building relationships outside the bloc was also important. 
Reported in: The Sunday Telegraph, The Guardian, The Daily Telegraph,   The Independent  

OTS proposes NICs shake-up

The Office of Tax Simplification has proposed changes to the way NICs are calculated which could see higher earners paying hundreds of pounds more a year, while easing the tax burden on temporary workers. The OTS suggests the “outdated system” needs to be reformed by moving to an annual, cumulative and aggregate (ACA) basis for employees’ NICs and basing employers’ NICs on whole payroll costs. The proposal has been welcomed by both the LITRG and the CIOT. However, the ACCA’s Chas Roy-Chowdhury warned that some workers could find themselves worse off.

Reported in:Financial Times, Daily Mail, The Daily Telegraph

OUTLOOK

Business optimism falls on Brexit fears

The latest Markit Business Outlook survey reveals optimism among UK companies has fallen to its lowest level in more than four years amid fears about upcoming Brexit negotiations. The net balance of enterprises expecting growth or contraction in their business activity over the next 12 months fell to +38% in October, down from +40% in June, its lowest level since June 2012.

Reported in: Independent I

LENDING

Crowdfunding deals down

Research by Beauhurst has revealed the number of crowdfunding deals fell 20% in the third quarter of this year. Beauhurst said Brexit had caused many high-growth firms to pause and question access to markets, but also that investors appeared to be becoming more wary of early-stage firms.

Reported in: The Mail on Sunday

FINANCE

Brexit without transitional deal will damage economy

The chairman of RBS, Howard Davies, has warned that if Britain does not agree a transitional agreement with the EU for the country’s financial services sector, it will be damaging for the economy. Mr Davies said that suddenly breaking off from the EU would be “destabilising” for European financial markets. He explained: “It is damaging if we don’t get a transitional deal because I think you will then see banks and financial institutions making decisions on the basis of uncertainty. They are currently making contingency plans and once you have got a contingency plan there is a risk you might implement it one day and therefore I think that it is quite urgent.”

Reported in: The Guardian, The Independent

May urged to tackle late payers

The FSB is calling on Theresa May to tackle the scourge of late payment and supply chain "bullying" on small companies as part of her drive to clean up corporate governance. A report by the group warned that the UK “risks having a business culture where it is acceptable not to pay on time”. FSB research also found the problem has got worse over the past five years, with 30% of payments typically late compared with 28% in 2011.

Reported in: The Times

INVESTMENT

Firms scrap £65bn of investment since Brexit vote

A survey by the CEBR shows that British businesses have abandoned investment plans worth more than £65bn since the Brexit vote five months ago. The survey of more than 1,000 companies found that uncertainty about the UK's future in the single market and the falling value of sterling were driving down investment. Nearly half of large companies surveyed by the CEBR had cancelled investment plans since July, with medium-sized businesses most sensitive to the outcome of the referendum. More than one in five cited uncertainty over the UK's membership of the single market for delaying investment. A similar number cited the falling pound.

Reported in: The Times  

IoD calls for more tax relief for investment

The IoD is calling on the government to offer more tax relief for companies who want to increase investment. The group has urged the chancellor to increase the annual investment allowance for businesses from £200,000 to £1m in his Autumn Statement next week. The IoD has also recommended that the government launches a consultation on radical tax reforms, including a replacement for corporation tax, which it claims is becoming "increasingly poorly suited to taxing global business". A poll of business owners by the IoD found half were pessimistic about the wider UK economy in the year ahead, up from a third in September.

Reported in: The Times    The Daily Telegraph

EXPORTS

Export vouchers will help SMEs to grow

A group of 14 small business bodies wants the government to introduce export vouchers to help companies develop overseas markets. The bodies, which include support network Enterprise Nation and the Forum of Private Business, have written to Philip Hammond urging him to invest around £20m in a voucher initiative. Enterprise Nation founder Emma Jones, who is heading the Small Business Taskforce, said the need for support is becoming more pressing.

Reported in: The Mail on Sunday

MANUFACTURING

EEF calls for manufacturing boost

The EEF is calling on Philip Hammond to boost innovation, infrastructure and digital technology when he delivers the Autumn Statement later this month. The group’s research indicates that one in four manufacturing companies are holding off investment plans due to the uncertain economic climate, and an EEF spokesman said: "While the Statement must reinforce a commitment to prudent financial planning, the Chancellor must signal a moderate fiscal stimulus package aimed at boosting innovation and export support for UK manufacturers.”

Reported in: Yorkshire Post

REAL ESTATE

Stamp duty reforms slow property market

An analysis by Oxford Economics has found George Osborne’s stamp duty reforms have slowed the housing market and raised half as much money as the Treasury predicted. The Exchequer received an estimated £370m less in stamp duty receipts than the boost of £700m it anticipated during the first year of the policy. Experts also said it led to a steep decline in property sales and has cost the economy nearly £1bn because of a reduction in the number of people selling homes and a subsequent reduction in demand for related services. The Telegraph’s Isabelle Fraser and Olivia Rudgard consider why the former chancellor’s much trumpeted reforms appear to have failed

Reported in: The Daily Telegraph, The Daily Telegraph, The Times, The Sun

FCA considering property fund rules after Brexit panic

The Financial Conduct Authority is considering changing the rules governing commercial property funds to prevent a repeat of the panic that followed the Brexit vote. The regulator is expected to focus on how the industry and its investors can be better protected during future periods of market stress. One option, according to experts, could be to push asset managers away from offering funds which allow investors to pull out money without notice.

Reported in: Reuters

CONSTRUCTION

Infrastructure work gives fillip to UK construction figures

Construction output fell by 1.1% in the third quarter compared with a 0.1% fall in the quarter before, according to figures from the ONS. However, the ONS said construction output rose 0.3% in September, up from a revised 1.1% fall in August and above economists' expectations of a 0.4% drop, thanks to a jump in infrastructure work.

Reported in: The Times, Independent I, The Independent, Financial Times, The Daily Telegraph  

EMPLOYMENT

Commission calls for ban on unpaid internships

The Social Mobility Commission’s annual State of the Nation report will call for unpaid internships to be banned. It says the most sought-after professions, such as law and the media, have become even less representative than the most selective universities, as jobs have become effectively closed off to those without a network of contacts and significant financial support. The Commission argues that after four weeks, work experience should be classified as an internship and be paid at least the minimum wage.

Reported in: The Sunday Times, The Observer, The Sun

Fifth of Britons in precarious jobs

A study by the Resolution Foundation suggests more than one in five workers - 7.1m people - now face precarious employment conditions that mean they could lose their work suddenly. The figure represents a sharp rise from 5.3m in 2006, as businesses insist on using more self-employed workers and increasingly recruit staff on temporary and zero-hours contracts.

Reported in: The Guardian

START-UPS

Tech accelerator targets Scotland

RocketSpace, the US technology accelerator that has helped nurture the likes of Uber and Spotify, is eyeing a possible expansion into Scotland. RocketSpace has so far seen 17 so-called "unicorns" - start-ups valued at more than $1bn - pass through its doors, and is now looking to tap into Scotland's tech scene. It is due to open a base in London early next year on the back of a tie-up with Royal Bank of Scotland.

Reported in: The Scotsman

Williams launches investment fund

Formula One team Williams is launching a £20m fund that will invest in engineering and technology start-ups. The fund will be backed by private equity group Foresight.

Reported in: The Sunday Telegraph

 ECONOMY

 Inflation rate falls in October

Inflation, as measured by the consumer prices index, fell to 0.9% in October, down from September’s rate of 1% and below economists’ predictions of 1.1%. Food prices fell by 2.4% on the year, while clothing prices fell by 0.7% amid strong competition and unseasonable weather. However, costs for producers of goods jumped, with monthly input prices rising 4.6% in October. Meanwhile, during an appearance before the Treasury Select Committee, Mark Carney said that higher inflation was “going to come”. The Bank of England believes inflation will rise to 2.8% next year, while some economists predict it could rise to more than 3%.

Reported in: The Daily Telegraph, Financial Times, The Times  

 TECHNOLOGY

Tech start-ups answer Berlin’s call

Berlin claims that attempts to lure London's technology start-ups in the wake of the Brexit vote is paying dividends, with five companies said to have relocated and a further 39 considering a move. Several early stage companies, including MBJ, a web design firm; Swissbank, a fintech start-up; and Brickvest, a property investment platform have taken Berlin up on the offer, according to reports in the FT. However, the Telegraph’s James Titcomb argues that the impact of the Brexit vote on Britain’s tech start-ups has actually been far less severe than predicted. He plays down the significance of start-ups moving to Berlin and quotes Matt Clifford, chief executive of Entrepreneur First, who says that the falling pound has in fact made it easier for US investors to put money into the UK’s tech sector.

Reported in: The Times, The Daily Telegraph

OIL & GAS

Weaker pound boosts Aggreko

Aggreko said its sales have been boosted by the slump in the pound, offsetting the effects of the oil and gas downturn on its business. The Scottish temporary power firm said its underlying third quarter revenue was down by 7% on a year ago. But reported revenue for the three months to September 30 rose by 8%, boosted by a stronger US dollar against sterling. Aggreko also said it was reviewing the value of its North American fleet of oil and gas generators after further weakness in that market dragged down its third quarter performance.

Reported in: The Press and Journal, The Herald

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