Accountants targeted in tax crackdown
Accountants who help tax evaders use offshore accounts are to be fined and publicly named under tough new sanctions which have come into effect from January 1st. Any individual or corporation who deliberately aids the evasion of tax will face fines of up to 100% of the amount they helped evade, at a minimum of £3,000. While tax evasion has always been illegal, the law will mean HMRC can charge civil penalties on those providing planning, advice and other professional services, or who have physically moved funds offshore to evade tax. Jane Ellison, financial secretary to the Treasury, said: "Tax evasion is a crime and as a government we have led reform of the international tax system to root it out. Closer to home we are creating a tax system where taxes are fair, competitive and paid. The raft of measures we have introduced to tackle avoidance and evasion will create a level playing field for the vast majority of people and businesses who play fair and pay up."
Reported in: The Observer, Sunday Express, BBC News, Financial Times, The Times, Daily Mirror
Business rates appeals may be blocked
The Telegraph reports that companies are facing a business rates ‘black hole’ of up to £6bn, after it emerged the government plans to reform the business rates appeals process at the same time as it increases rates. Ministers reportedly want the power to throw out any business rates appeal if it is within a margin of error of up to 15%, meaning a firm could potentially be blocked from appealing even if it can prove it is being charged too much tax. Meanwhile, the Telegraph’s Jeremy Warner warns that a “significant number” of businesses will be ruined when changes to the business rates system take effect next April. He says that some will be hit with an immediate increase in the tax on their properties of 42%, with still worse to come in future years. He urges the government to reconsider its plans, arguing that Brexit means the UK must position itself as “one of the most business friendly places on the planet.” To meet this ambition requires a low tax, deregulatory agenda of “truly revolutionary intent”, says Mr Warner.
Reported in: The Daily Telegraph, The Daily Telegraph
Business leaders unite for successful Brexit
Five of Britain’s biggest business groups have written an open letter pledging to work with companies from “'all corners of Britain” to take advantage of the opportunities offered by leaving the EU. The CBI, the BCC, the Institute of Directors, the FSB and EEF have all said that they are “committed to making 2017 a year of progress and success and to working with the Government to shape a better economy.” The statement comes as official figures show the UK exported £247bn worth of goods in the first ten months of 2016 - up more than 3% on the same period the previous year. Analysts believe 2016 will be the first year of export growth since 2013.
Reported in: Daily Express, Daily Mail
Smaller firms fear Brexit cut
A report from Lloyds Bank has found that economic uncertainty remains the biggest threat facing the UK’s small businesses in 2017. The bank’s confidence index - which asked 1,500 UK companies about their expected sales, orders and profits over the next six months - found that 14% expect their business to grow, compared to 12% last year. Lloyds said UK business owners are resilient but that they are wary about external risks that could dent their business.
Reported in: The Independent, The Guardian, The Times
Business optimism recovers
A new survey from the British Chambers of Commerce reveals rising confidence among businesses across the economy in Q4 of 2016, recovering from a fall in confidence over the summer following the vote to leave the EU.
Reported in: The Daily Telegraph, BBC News, BBC News
M&A deals fall by half
M&As involving British companies fell by more than 50% during 2016, from $603bn to $355bn, according to data from Dealogic. Analysis of Dealogic’s data shows that 2,666 British companies were bought this year in deals that totalled nearly $173bn, compared with nearly $193bn of deals agreed last year. In addition, fewer British companies are buying domestic rivals, with deals totalling $63.5bn compared with nearly $83bn previously.
Reported in: Financial Times, The Times
Fox highlights billions of foreign investment
International trade secretary Liam Fox has rejected claims that Brexit will hit investment in Britain, saying that his department has secured over £16.3bn in foreign direct investment since the summer. Dr Fox said the Department for International Trade had brought in billions of investment in the past five months across sectors including property development, infrastructure, housing and renewable energy. Government figures show 2,213 foreign investment projects were secured in 2015-16, an 11% increase on the previous year. Jonathan Portes, from the National Institute of Economic and Social Research, warned: "It's far too early to conclude anything from these statistics."
Reported in: The Times, The Daily Telegraph, Independent, I, Daily Mail, Daily Express
FSB: Small firms should be freed up to generate power
The Federation of Small Businesses (FSB) has called on the government to remove barriers preventing SMEs from producing their own electricity amid fears over UK energy security and climate obligations. Making it easier and more attractive for small firms to contribute to the generation of green energy would both help to meet carbon targets and make the UK more self-sufficient with supplies, the FSB said.
Reported in: The Daily Telegraph
UK businesses lack export ambition
Research by the ICAEW suggests the share of UK companies selling goods and services abroad has stagnated over the past two years, with 53% of businesses exporting in 2016, unchanged from 2014. Stephen Ibbotson, the ICAEW’s director of business, called for more incentives for companies to export in a post-Brexit world.
Reported in: The Daily Telegraph
Tsar to crack down on rogue bosses
Sir David Metcalf, a founding member of the Low Pay Commission and former chair of the Migration Advisory Committee, has been named as the first director of labour market enforcement. He will coordinate the aggregation of intelligence from HMRC’s National Minimum Wage Enforcement Unit, the Gangmasters and Labour Abuse Authority (GLAA) and the Employment Agency Standards Inspectorate (EAS). Sources suggest Sir David may look at using new anti-slavery legislation to see whether the offence of aggravated exploitation, which carries a jail term of up to two years, could be applied to companies that refuse to pay workers the minimum wage. Currently, these businesses can only be named and shamed.
Reported in: The Daily Telegraph, The Times, The Guardian, City AM, Daily Mirror
UK's manufacturing figures are fizzing
Activity in the UK's manufacturing sector has hit a two-and-a-half-year high, according to the latest Markit/CIPS purchasing managers' index, which rose to 56.1 in December from November's 53.6. "Based on its historical relationship against official manufacturing output data, the survey is signalling a quarterly pace of growth approaching 1.5%, a surprisingly robust pace given the lacklustre start to the year and the uncertainty surrounding the EU referendum," said Rob Dobson, senior economist at IHS Markit.
Reported in: BBC News, The Times, Financial Times, The Daily Telegraph, Independent I, The Guardian
Skills crisis hits construction
The Federation of Master Builders (FMB) has warned that a shortage of skilled workers may hit efforts to ease the housing crisis. FMB figures show that 59% of small and medium-sized construction firms are struggling to hire skilled bricklayers, while 55% are finding it difficult to recruit carpenters and joiners. FMB chief executive Brian Berry says this is “starting to have a very real effect on the industry's capacity to deliver more homes,” while John Tutte, chief executive of Redrow, commented: “A drive for more homes must come hand in hand with a drive to recruit workers.”
Reported in: Daily Mail
Wages set to rise in record jobs market
Low unemployment combined with strong global economic growth looks set to drive up wages in 2017. According to Oxford Economics, UK wage inflation will accelerate from 2.4% in 2016 to 2.9% over this year. Unemployment is at an 11-year low of 4.8%, and the employment rate of 74.4% is almost the highest on record, putting upward pressure on pay. Income growth for the lowest paid has also been driven by the new national living wage, which was introduced last April to raise the minimum hourly pay to £7.20 for workers over 25. The rate will rise to £7.50 in the coming year and is set to hit £9 by 2020.
Reported in: The Daily Telegraph
Zero-hours workers lose £1,000 a year
A study by the Resolution Foundation has revealed workers on zero-hours contracts earn £1,000 a year less than other employees who do the same job. The think-tank said the pay penalty directly associated with zero-hours work itself amounted to 6.6%, or 93p an hour. For a typical zero-hours worker, working 21 hours a week, this penalty amounts to £1,000 a year. An examination of workers in low-paid roles revealed a bigger penalty of 9.5%. The Resolution Foundation believes its analysis was the first to pinpoint a specific penalty associated with zero-hour contracts.
Reported in: The Guardian, Daily Mail, The Times, Daily Express, City AM, BBC News
UK support to tech firms 'an embarrassment', says CES boss
The UK government's lack of support for start-ups attending the CES tech show is a "source of embarrassment", according to the event's organiser Gary Shapiro, who compared the country unfavourably with the Netherlands, Israel and France, which has almost five times as many companies attending this year's CES as Britain has. Mr Shapiro stressed he was not calling on the UK to subsidise its young companies' CES appearances: "Government support is not just funding; I want to make that very clear. It's a matter of [attracting] attention. We're having the prince of the Netherlands show up, for example. I think there's a great opportunity for the UK, which is untapped," he added.
Reported in: BBC News, Evening Standard
Confidence in economy falls
A YouGov/Times survey has found just 11% of Britons think that their financial situation will improve over the coming year, down from 21% in December 2015, while 38% think their household finances will get worse in the coming year. The poll also found that 22% of people think that the overall economy is doing well, down from 35% a year ago. The EU referendum is heavily influencing optimism, with 46% of remainers saying the economy is in bad shape compared with 19% of those who voted to leave. Elsewhere, John Veihmeyer, the global chairman of KPMG, has stated that the rise of populism in Europe is a far greater threat to the continent's stability than Britain's decision to leave the EU.
Reported in: The Times, The Independent on Sunday
OIL & GAS
Oil and gas insolvencies rise
The number of UK oil and gas companies going insolvent has reached an all-time high following the slump in prices. A total of 16 businesses became insolvent last year, up from two the year before, and none in 2012, said Moore Stephens.
Reported in: Daily Mail, The Sun, The Independent